Correlation Between Tibet Huayu and Shenzhen Zhongzhuang
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By analyzing existing cross correlation between Tibet Huayu Mining and Shenzhen Zhongzhuang Construction, you can compare the effects of market volatilities on Tibet Huayu and Shenzhen Zhongzhuang 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 Tibet Huayu with a short position of Shenzhen Zhongzhuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tibet Huayu and Shenzhen Zhongzhuang.
Diversification Opportunities for Tibet Huayu and Shenzhen Zhongzhuang
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tibet and Shenzhen is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Tibet Huayu Mining and Shenzhen Zhongzhuang Construct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Zhongzhuang and Tibet Huayu 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 Tibet Huayu Mining are associated (or correlated) with Shenzhen Zhongzhuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Zhongzhuang has no effect on the direction of Tibet Huayu i.e., Tibet Huayu and Shenzhen Zhongzhuang go up and down completely randomly.
Pair Corralation between Tibet Huayu and Shenzhen Zhongzhuang
Assuming the 90 days trading horizon Tibet Huayu is expected to generate 23.87 times less return on investment than Shenzhen Zhongzhuang. But when comparing it to its historical volatility, Tibet Huayu Mining is 1.07 times less risky than Shenzhen Zhongzhuang. It trades about 0.01 of its potential returns per unit of risk. Shenzhen Zhongzhuang Construction is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 181.00 in Shenzhen Zhongzhuang Construction on October 14, 2024 and sell it today you would earn a total of 141.00 from holding Shenzhen Zhongzhuang Construction or generate 77.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tibet Huayu Mining vs. Shenzhen Zhongzhuang Construct
Performance |
| Timeline |
| Tibet Huayu Mining |
| Shenzhen Zhongzhuang |
Tibet Huayu and Shenzhen Zhongzhuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tibet Huayu and Shenzhen Zhongzhuang
The main advantage of trading using opposite Tibet Huayu and Shenzhen Zhongzhuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tibet Huayu position performs unexpectedly, Shenzhen Zhongzhuang 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 Zhongzhuang will offset losses from the drop in Shenzhen Zhongzhuang's long position.| Tibet Huayu vs. Zijin Mining Group | Tibet Huayu vs. Wanhua Chemical Group | Tibet Huayu vs. Baoshan Iron Steel | Tibet Huayu vs. Shandong Gold Mining |
| Shenzhen Zhongzhuang vs. Tibet Huayu Mining | Shenzhen Zhongzhuang vs. Wuhan Yangtze Communication | Shenzhen Zhongzhuang vs. Sunwave Communications Co | Shenzhen Zhongzhuang vs. Suzhou Industrial Park |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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