Correlation Between Shanghai Pudong and Shenzhen MTC
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By analyzing existing cross correlation between Shanghai Pudong Development and Shenzhen MTC Co, you can compare the effects of market volatilities on Shanghai Pudong and Shenzhen MTC 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 Shanghai Pudong with a short position of Shenzhen MTC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Pudong and Shenzhen MTC.
Diversification Opportunities for Shanghai Pudong and Shenzhen MTC
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Shenzhen is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Pudong Development and Shenzhen MTC Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen MTC and Shanghai Pudong 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 Shanghai Pudong Development are associated (or correlated) with Shenzhen MTC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen MTC has no effect on the direction of Shanghai Pudong i.e., Shanghai Pudong and Shenzhen MTC go up and down completely randomly.
Pair Corralation between Shanghai Pudong and Shenzhen MTC
Assuming the 90 days trading horizon Shanghai Pudong Development is expected to under-perform the Shenzhen MTC. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Pudong Development is 1.47 times less risky than Shenzhen MTC. The stock trades about -0.22 of its potential returns per unit of risk. The Shenzhen MTC Co is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 529.00 in Shenzhen MTC Co on August 29, 2024 and sell it today you would lose (39.00) from holding Shenzhen MTC Co or give up 7.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Pudong Development vs. Shenzhen MTC Co
Performance |
| Timeline |
| Shanghai Pudong Deve |
| Shenzhen MTC |
Shanghai Pudong and Shenzhen MTC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Pudong and Shenzhen MTC
The main advantage of trading using opposite Shanghai Pudong and Shenzhen MTC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Pudong position performs unexpectedly, Shenzhen MTC 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 Shenzhen MTC will offset losses from the drop in Shenzhen MTC's long position.| Shanghai Pudong vs. Jiaozuo Wanfang Aluminum | Shanghai Pudong vs. Rising Nonferrous Metals | Shanghai Pudong vs. Zhongyin Babi Food | Shanghai Pudong vs. Xinjiang Tianrun Dairy |
| Shenzhen MTC vs. Kweichow Moutai Co | Shenzhen MTC vs. NAURA Technology Group | Shenzhen MTC vs. Zhejiang Orient Gene | Shenzhen MTC vs. APT Medical |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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