Correlation Between Hua Xia and Shenzhen MYS
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By analyzing existing cross correlation between Hua Xia Bank and Shenzhen MYS Environmental, you can compare the effects of market volatilities on Hua Xia and Shenzhen MYS 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 Hua Xia with a short position of Shenzhen MYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Xia and Shenzhen MYS.
Diversification Opportunities for Hua Xia and Shenzhen MYS
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hua and Shenzhen is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hua Xia Bank and Shenzhen MYS Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen MYS Environ and Hua Xia 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 Hua Xia Bank are associated (or correlated) with Shenzhen MYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen MYS Environ has no effect on the direction of Hua Xia i.e., Hua Xia and Shenzhen MYS go up and down completely randomly.
Pair Corralation between Hua Xia and Shenzhen MYS
Assuming the 90 days trading horizon Hua Xia is expected to generate 2.69 times less return on investment than Shenzhen MYS. But when comparing it to its historical volatility, Hua Xia Bank is 2.5 times less risky than Shenzhen MYS. It trades about 0.23 of its potential returns per unit of risk. Shenzhen MYS Environmental is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 329.00 in Shenzhen MYS Environmental on September 15, 2024 and sell it today you would earn a total of 77.00 from holding Shenzhen MYS Environmental or generate 23.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hua Xia Bank vs. Shenzhen MYS Environmental
Performance |
| Timeline |
| Hua Xia Bank |
| Shenzhen MYS Environ |
Hua Xia and Shenzhen MYS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hua Xia and Shenzhen MYS
The main advantage of trading using opposite Hua Xia and Shenzhen MYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Xia position performs unexpectedly, Shenzhen MYS 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 MYS will offset losses from the drop in Shenzhen MYS's long position.| Hua Xia vs. Industrial and Commercial | Hua Xia vs. China Construction Bank | Hua Xia vs. Bank of China | Hua Xia vs. Agricultural Bank of |
| Shenzhen MYS vs. Shanghai Yanpu Metal | Shenzhen MYS vs. Inly Media Co | Shenzhen MYS vs. Pengxin International Mining | Shenzhen MYS vs. Air China Ltd |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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