Correlation Between China State and Shenzhen Glory
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By analyzing existing cross correlation between China State Construction and Shenzhen Glory Medical, you can compare the effects of market volatilities on China State and Shenzhen Glory 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 China State with a short position of Shenzhen Glory. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Shenzhen Glory.
Diversification Opportunities for China State and Shenzhen Glory
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Shenzhen is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Shenzhen Glory Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Glory Medical and China State 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 China State Construction are associated (or correlated) with Shenzhen Glory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Glory Medical has no effect on the direction of China State i.e., China State and Shenzhen Glory go up and down completely randomly.
Pair Corralation between China State and Shenzhen Glory
Assuming the 90 days trading horizon China State Construction is expected to under-perform the Shenzhen Glory. But the stock apears to be less risky and, when comparing its historical volatility, China State Construction is 1.19 times less risky than Shenzhen Glory. The stock trades about -0.01 of its potential returns per unit of risk. The Shenzhen Glory Medical is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 325.00 in Shenzhen Glory Medical on September 1, 2024 and sell it today you would earn a total of 13.00 from holding Shenzhen Glory Medical or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China State Construction vs. Shenzhen Glory Medical
Performance |
| Timeline |
| China State Construction |
| Shenzhen Glory Medical |
China State and Shenzhen Glory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Shenzhen Glory
The main advantage of trading using opposite China State and Shenzhen Glory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Shenzhen Glory 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 Glory will offset losses from the drop in Shenzhen Glory's long position.| China State vs. Hunan Investment Group | China State vs. Huaibei Mining Holdings | China State vs. Metro Investment Development | China State vs. Postal Savings Bank |
| Shenzhen Glory vs. Industrial and Commercial | Shenzhen Glory vs. Agricultural Bank of | Shenzhen Glory vs. China Construction Bank | Shenzhen Glory vs. Bank of China |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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