Correlation Between New China and Shenzhen Longsys
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By analyzing existing cross correlation between New China Life and Shenzhen Longsys Electronics, you can compare the effects of market volatilities on New China and Shenzhen Longsys 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 New China with a short position of Shenzhen Longsys. Check out your portfolio center. Please also check ongoing floating volatility patterns of New China and Shenzhen Longsys.
Diversification Opportunities for New China and Shenzhen Longsys
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between New and Shenzhen is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding New China Life and Shenzhen Longsys Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Longsys Ele and New China 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 New China Life are associated (or correlated) with Shenzhen Longsys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Longsys Ele has no effect on the direction of New China i.e., New China and Shenzhen Longsys go up and down completely randomly.
Pair Corralation between New China and Shenzhen Longsys
Assuming the 90 days trading horizon New China Life is expected to generate 1.08 times more return on investment than Shenzhen Longsys. However, New China is 1.08 times more volatile than Shenzhen Longsys Electronics. It trades about -0.06 of its potential returns per unit of risk. Shenzhen Longsys Electronics is currently generating about -0.1 per unit of risk. If you would invest 4,865 in New China Life on August 29, 2024 and sell it today you would lose (265.00) from holding New China Life or give up 5.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
New China Life vs. Shenzhen Longsys Electronics
Performance |
| Timeline |
| New China Life |
| Shenzhen Longsys Ele |
New China and Shenzhen Longsys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New China and Shenzhen Longsys
The main advantage of trading using opposite New China and Shenzhen Longsys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New China position performs unexpectedly, Shenzhen Longsys 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 Longsys will offset losses from the drop in Shenzhen Longsys' long position.| New China vs. Shaanxi Meineng Clean | New China vs. Jiamei Food Packaging | New China vs. Yankershop Food Co | New China vs. AVCON Information Tech |
| Shenzhen Longsys vs. Guangzhou Ruoyuchen Information | Shenzhen Longsys vs. Cofoe Medical Technology | Shenzhen Longsys vs. Northking Information Technology | Shenzhen Longsys vs. Xian International Medical |
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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