Correlation Between China State and Shenzhen
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By analyzing existing cross correlation between China State Construction and Shenzhen AV Display Co, you can compare the effects of market volatilities on China State and Shenzhen 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Shenzhen.
Diversification Opportunities for China State and Shenzhen
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Shenzhen is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Shenzhen AV Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen AV Display 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen AV Display has no effect on the direction of China State i.e., China State and Shenzhen go up and down completely randomly.
Pair Corralation between China State and Shenzhen
Assuming the 90 days trading horizon China State Construction is expected to generate 0.5 times more return on investment than Shenzhen. However, China State Construction is 2.0 times less risky than Shenzhen. It trades about 0.06 of its potential returns per unit of risk. Shenzhen AV Display Co is currently generating about 0.01 per unit of risk. If you would invest 476.00 in China State Construction on September 3, 2024 and sell it today you would earn a total of 127.00 from holding China State Construction or generate 26.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China State Construction vs. Shenzhen AV Display Co
Performance |
| Timeline |
| China State Construction |
| Shenzhen AV Display |
China State and Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Shenzhen
The main advantage of trading using opposite China State and Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Shenzhen 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 will offset losses from the drop in Shenzhen's long position.| China State vs. Citic Guoan Wine | China State vs. Shanghai Yanpu Metal | China State vs. Tongyu Communication | China State vs. Guangxi Wuzhou Communications |
| Shenzhen vs. Beijing SPC Environment | Shenzhen vs. Sinocat Environmental Technology | Shenzhen vs. Pengxin International Mining | Shenzhen vs. Minmetals Capital Co |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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