Correlation Between Shenzhen Urban and Guangdong Tianhe
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By analyzing existing cross correlation between Shenzhen Urban Transport and Guangdong Tianhe Agricultural, you can compare the effects of market volatilities on Shenzhen Urban and Guangdong Tianhe and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Shenzhen Urban with a short position of Guangdong Tianhe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Urban and Guangdong Tianhe.
Diversification Opportunities for Shenzhen Urban and Guangdong Tianhe
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shenzhen and Guangdong is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Urban Transport and Guangdong Tianhe Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Tianhe Agr and Shenzhen Urban is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Shenzhen Urban Transport are associated (or correlated) with Guangdong Tianhe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Tianhe Agr has no effect on the direction of Shenzhen Urban i.e., Shenzhen Urban and Guangdong Tianhe go up and down completely randomly.
Pair Corralation between Shenzhen Urban and Guangdong Tianhe
Assuming the 90 days trading horizon Shenzhen Urban is expected to generate 1.65 times less return on investment than Guangdong Tianhe. In addition to that, Shenzhen Urban is 1.32 times more volatile than Guangdong Tianhe Agricultural. It trades about 0.1 of its total potential returns per unit of risk. Guangdong Tianhe Agricultural is currently generating about 0.21 per unit of volatility. If you would invest 563.00 in Guangdong Tianhe Agricultural on November 6, 2024 and sell it today you would earn a total of 39.00 from holding Guangdong Tianhe Agricultural or generate 6.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Urban Transport vs. Guangdong Tianhe Agricultural
Performance |
| Timeline |
| Shenzhen Urban Transport |
| Guangdong Tianhe Agr |
Shenzhen Urban and Guangdong Tianhe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Urban and Guangdong Tianhe
The main advantage of trading using opposite Shenzhen Urban and Guangdong Tianhe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Urban position performs unexpectedly, Guangdong Tianhe can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Guangdong Tianhe will offset losses from the drop in Guangdong Tianhe's long position.| Shenzhen Urban vs. Shandong Sanyuan Biotechnology | Shenzhen Urban vs. Aba Chemicals Corp | Shenzhen Urban vs. Yingde Greatchem Chemicals | Shenzhen Urban vs. Porton Fine Chemicals |
| Guangdong Tianhe vs. Ningbo Jintian Copper | Guangdong Tianhe vs. Uroica Mining Safety | Guangdong Tianhe vs. Mango Excellent Media | Guangdong Tianhe vs. Chengtun Mining Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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