Correlation Between Hainan Haiqi and Shenzhen Zhongzhuang
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By analyzing existing cross correlation between Hainan Haiqi Transportation and Shenzhen Zhongzhuang Construction, you can compare the effects of market volatilities on Hainan Haiqi 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 Hainan Haiqi with a short position of Shenzhen Zhongzhuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Haiqi and Shenzhen Zhongzhuang.
Diversification Opportunities for Hainan Haiqi and Shenzhen Zhongzhuang
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hainan and Shenzhen is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Haiqi Transportation and Shenzhen Zhongzhuang Construct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Zhongzhuang and Hainan Haiqi 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 Hainan Haiqi Transportation 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 Hainan Haiqi i.e., Hainan Haiqi and Shenzhen Zhongzhuang go up and down completely randomly.
Pair Corralation between Hainan Haiqi and Shenzhen Zhongzhuang
Assuming the 90 days trading horizon Hainan Haiqi Transportation is expected to generate 0.82 times more return on investment than Shenzhen Zhongzhuang. However, Hainan Haiqi Transportation is 1.22 times less risky than Shenzhen Zhongzhuang. It trades about 0.15 of its potential returns per unit of risk. Shenzhen Zhongzhuang Construction is currently generating about 0.1 per unit of risk. If you would invest 1,690 in Hainan Haiqi Transportation on November 8, 2024 and sell it today you would earn a total of 121.00 from holding Hainan Haiqi Transportation or generate 7.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Haiqi Transportation vs. Shenzhen Zhongzhuang Construct
Performance |
| Timeline |
| Hainan Haiqi Transpo |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shenzhen Zhongzhuang |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Hainan Haiqi and Shenzhen Zhongzhuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Haiqi and Shenzhen Zhongzhuang
The main advantage of trading using opposite Hainan Haiqi and Shenzhen Zhongzhuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Haiqi 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.The idea behind Hainan Haiqi Transportation and Shenzhen Zhongzhuang Construction pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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