Correlation Between Shanghai Zhangjiang and Guangdong Shenglu
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By analyzing existing cross correlation between Shanghai Zhangjiang Hi Tech and Guangdong Shenglu Telecommunication, you can compare the effects of market volatilities on Shanghai Zhangjiang and Guangdong Shenglu 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 Zhangjiang with a short position of Guangdong Shenglu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Zhangjiang and Guangdong Shenglu.
Diversification Opportunities for Shanghai Zhangjiang and Guangdong Shenglu
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shanghai and Guangdong is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Zhangjiang Hi Tech and Guangdong Shenglu Telecommunic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Shenglu and Shanghai Zhangjiang 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 Zhangjiang Hi Tech are associated (or correlated) with Guangdong Shenglu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Shenglu has no effect on the direction of Shanghai Zhangjiang i.e., Shanghai Zhangjiang and Guangdong Shenglu go up and down completely randomly.
Pair Corralation between Shanghai Zhangjiang and Guangdong Shenglu
Assuming the 90 days trading horizon Shanghai Zhangjiang Hi Tech is expected to generate 1.6 times more return on investment than Guangdong Shenglu. However, Shanghai Zhangjiang is 1.6 times more volatile than Guangdong Shenglu Telecommunication. It trades about 0.07 of its potential returns per unit of risk. Guangdong Shenglu Telecommunication is currently generating about -0.01 per unit of risk. If you would invest 2,657 in Shanghai Zhangjiang Hi Tech on August 29, 2024 and sell it today you would earn a total of 145.00 from holding Shanghai Zhangjiang Hi Tech or generate 5.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Zhangjiang Hi Tech vs. Guangdong Shenglu Telecommunic
Performance |
| Timeline |
| Shanghai Zhangjiang |
| Guangdong Shenglu |
Shanghai Zhangjiang and Guangdong Shenglu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Zhangjiang and Guangdong Shenglu
The main advantage of trading using opposite Shanghai Zhangjiang and Guangdong Shenglu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Zhangjiang position performs unexpectedly, Guangdong Shenglu 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 Shenglu will offset losses from the drop in Guangdong Shenglu's long position.| Shanghai Zhangjiang vs. Industrial and Commercial | Shanghai Zhangjiang vs. China Construction Bank | Shanghai Zhangjiang vs. Bank of China | Shanghai Zhangjiang vs. Agricultural Bank of |
| Guangdong Shenglu vs. Shenzhen MYS Environmental | Guangdong Shenglu vs. AVIC Fund Management | Guangdong Shenglu vs. Shenzhen Bingchuan Network | Guangdong Shenglu vs. Penghua Shenzhen Energy |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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