Correlation Between Jiangsu Zhongtian and Shenzhen Inovance
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By analyzing existing cross correlation between Jiangsu Zhongtian Technology and Shenzhen Inovance Tech, you can compare the effects of market volatilities on Jiangsu Zhongtian and Shenzhen Inovance 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 Jiangsu Zhongtian with a short position of Shenzhen Inovance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Zhongtian and Shenzhen Inovance.
Diversification Opportunities for Jiangsu Zhongtian and Shenzhen Inovance
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiangsu and Shenzhen is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Zhongtian Technology and Shenzhen Inovance Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Inovance Tech and Jiangsu Zhongtian 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 Jiangsu Zhongtian Technology are associated (or correlated) with Shenzhen Inovance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Inovance Tech has no effect on the direction of Jiangsu Zhongtian i.e., Jiangsu Zhongtian and Shenzhen Inovance go up and down completely randomly.
Pair Corralation between Jiangsu Zhongtian and Shenzhen Inovance
Assuming the 90 days trading horizon Jiangsu Zhongtian Technology is expected to under-perform the Shenzhen Inovance. But the stock apears to be less risky and, when comparing its historical volatility, Jiangsu Zhongtian Technology is 1.08 times less risky than Shenzhen Inovance. The stock trades about -0.3 of its potential returns per unit of risk. The Shenzhen Inovance Tech is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,902 in Shenzhen Inovance Tech on September 28, 2024 and sell it today you would earn a total of 106.00 from holding Shenzhen Inovance Tech or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Jiangsu Zhongtian Technology vs. Shenzhen Inovance Tech
Performance |
| Timeline |
| Jiangsu Zhongtian |
| Shenzhen Inovance Tech |
Jiangsu Zhongtian and Shenzhen Inovance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Zhongtian and Shenzhen Inovance
The main advantage of trading using opposite Jiangsu Zhongtian and Shenzhen Inovance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Zhongtian position performs unexpectedly, Shenzhen Inovance 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 Inovance will offset losses from the drop in Shenzhen Inovance's long position.| Jiangsu Zhongtian vs. Kweichow Moutai Co | Jiangsu Zhongtian vs. Contemporary Amperex Technology | Jiangsu Zhongtian vs. G bits Network Technology | Jiangsu Zhongtian vs. BYD Co Ltd |
| Shenzhen Inovance vs. Innovative Medical Management | Shenzhen Inovance vs. Gifore Agricultural Machinery | Shenzhen Inovance vs. JCHX Mining Management | Shenzhen Inovance vs. Long Yuan Construction |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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