Correlation Between Shanghai Ziyan and Shenzhen Zhongzhuang
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By analyzing existing cross correlation between Shanghai Ziyan Foods and Shenzhen Zhongzhuang Construction, you can compare the effects of market volatilities on Shanghai Ziyan 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 Shanghai Ziyan with a short position of Shenzhen Zhongzhuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Ziyan and Shenzhen Zhongzhuang.
Diversification Opportunities for Shanghai Ziyan and Shenzhen Zhongzhuang
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Shenzhen is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Ziyan Foods and Shenzhen Zhongzhuang Construct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Zhongzhuang and Shanghai Ziyan 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 Ziyan Foods 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 Shanghai Ziyan i.e., Shanghai Ziyan and Shenzhen Zhongzhuang go up and down completely randomly.
Pair Corralation between Shanghai Ziyan and Shenzhen Zhongzhuang
Assuming the 90 days trading horizon Shanghai Ziyan Foods is expected to under-perform the Shenzhen Zhongzhuang. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Ziyan Foods is 1.65 times less risky than Shenzhen Zhongzhuang. The stock trades about 0.0 of its potential returns per unit of risk. The Shenzhen Zhongzhuang Construction is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 443.00 in Shenzhen Zhongzhuang Construction on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Shenzhen Zhongzhuang Construction or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Ziyan Foods vs. Shenzhen Zhongzhuang Construct
Performance |
| Timeline |
| Shanghai Ziyan Foods |
| Shenzhen Zhongzhuang |
Shanghai Ziyan and Shenzhen Zhongzhuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Ziyan and Shenzhen Zhongzhuang
The main advantage of trading using opposite Shanghai Ziyan and Shenzhen Zhongzhuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Ziyan 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.| Shanghai Ziyan vs. Hubeiyichang Transportation Group | Shanghai Ziyan vs. Anhui Transport Consulting | Shanghai Ziyan vs. Zhejiang Qianjiang Motorcycle | Shanghai Ziyan vs. Jinhui Liquor Co |
| Shenzhen Zhongzhuang vs. Agricultural Bank of | Shenzhen Zhongzhuang vs. Industrial and Commercial | Shenzhen Zhongzhuang vs. Bank of China | Shenzhen Zhongzhuang vs. PetroChina Co Ltd |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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