Correlation Between Datang HuaYin and Shenzhen SDG
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By analyzing existing cross correlation between Datang HuaYin Electric and Shenzhen SDG Information, you can compare the effects of market volatilities on Datang HuaYin and Shenzhen SDG 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 Datang HuaYin with a short position of Shenzhen SDG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang HuaYin and Shenzhen SDG.
Diversification Opportunities for Datang HuaYin and Shenzhen SDG
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Datang and Shenzhen is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Datang HuaYin Electric and Shenzhen SDG Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen SDG Information and Datang HuaYin 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 Datang HuaYin Electric are associated (or correlated) with Shenzhen SDG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen SDG Information has no effect on the direction of Datang HuaYin i.e., Datang HuaYin and Shenzhen SDG go up and down completely randomly.
Pair Corralation between Datang HuaYin and Shenzhen SDG
Assuming the 90 days trading horizon Datang HuaYin Electric is expected to under-perform the Shenzhen SDG. But the stock apears to be less risky and, when comparing its historical volatility, Datang HuaYin Electric is 1.14 times less risky than Shenzhen SDG. The stock trades about -0.02 of its potential returns per unit of risk. The Shenzhen SDG Information is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 602.00 in Shenzhen SDG Information on September 12, 2024 and sell it today you would earn a total of 8.00 from holding Shenzhen SDG Information or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Datang HuaYin Electric vs. Shenzhen SDG Information
Performance |
| Timeline |
| Datang HuaYin Electric |
| Shenzhen SDG Information |
Datang HuaYin and Shenzhen SDG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datang HuaYin and Shenzhen SDG
The main advantage of trading using opposite Datang HuaYin and Shenzhen SDG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang HuaYin position performs unexpectedly, Shenzhen SDG 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 SDG will offset losses from the drop in Shenzhen SDG's long position.| Datang HuaYin vs. Gansu Jiu Steel | Datang HuaYin vs. Shandong Mining Machinery | Datang HuaYin vs. Aba Chemicals Corp | Datang HuaYin vs. BlueFocus Communication Group |
| Shenzhen SDG vs. Gansu Jiu Steel | Shenzhen SDG vs. Shandong Mining Machinery | Shenzhen SDG vs. Aba Chemicals Corp | Shenzhen SDG vs. BlueFocus Communication 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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