Correlation Between China Building and Shenzhen Glory
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By analyzing existing cross correlation between China Building Material and Shenzhen Glory Medical, you can compare the effects of market volatilities on China Building 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 Building with a short position of Shenzhen Glory. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Building and Shenzhen Glory.
Diversification Opportunities for China Building and Shenzhen Glory
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Shenzhen is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding China Building Material 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 Building 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 Building Material 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 Building i.e., China Building and Shenzhen Glory go up and down completely randomly.
Pair Corralation between China Building and Shenzhen Glory
Assuming the 90 days trading horizon China Building Material is expected to generate 0.83 times more return on investment than Shenzhen Glory. However, China Building Material is 1.21 times less risky than Shenzhen Glory. It trades about -0.05 of its potential returns per unit of risk. Shenzhen Glory Medical is currently generating about -0.16 per unit of risk. If you would invest 757.00 in China Building Material on November 3, 2024 and sell it today you would lose (41.00) from holding China Building Material or give up 5.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Building Material vs. Shenzhen Glory Medical
Performance |
| Timeline |
| China Building Material |
| Shenzhen Glory Medical |
China Building and Shenzhen Glory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Building and Shenzhen Glory
The main advantage of trading using opposite China Building and Shenzhen Glory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Building 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 Building vs. Easyhome New Retail | China Building vs. Keda Clean Energy | China Building vs. Ningbo Homelink Eco iTech | China Building vs. Ziel Home Furnishing |
| Shenzhen Glory vs. China Longyuan Power | Shenzhen Glory vs. PetroChina Co Ltd | Shenzhen Glory vs. Guangxi Guiguan Electric | Shenzhen Glory vs. Yantai North Andre |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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