Correlation Between Changshu Tongrun and Shenzhen Glory
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By analyzing existing cross correlation between Changshu Tongrun Auto and Shenzhen Glory Medical, you can compare the effects of market volatilities on Changshu Tongrun 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 Changshu Tongrun with a short position of Shenzhen Glory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changshu Tongrun and Shenzhen Glory.
Diversification Opportunities for Changshu Tongrun and Shenzhen Glory
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Changshu and Shenzhen is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Changshu Tongrun Auto 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 Changshu Tongrun 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 Changshu Tongrun Auto 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 Changshu Tongrun i.e., Changshu Tongrun and Shenzhen Glory go up and down completely randomly.
Pair Corralation between Changshu Tongrun and Shenzhen Glory
Assuming the 90 days trading horizon Changshu Tongrun Auto is expected to generate 1.62 times more return on investment than Shenzhen Glory. However, Changshu Tongrun is 1.62 times more volatile than Shenzhen Glory Medical. It trades about 0.08 of its potential returns per unit of risk. Shenzhen Glory Medical is currently generating about 0.07 per unit of risk. If you would invest 1,706 in Changshu Tongrun Auto on August 26, 2024 and sell it today you would earn a total of 107.00 from holding Changshu Tongrun Auto or generate 6.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changshu Tongrun Auto vs. Shenzhen Glory Medical
Performance |
| Timeline |
| Changshu Tongrun Auto |
| Shenzhen Glory Medical |
Changshu Tongrun and Shenzhen Glory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changshu Tongrun and Shenzhen Glory
The main advantage of trading using opposite Changshu Tongrun and Shenzhen Glory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changshu Tongrun 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.| Changshu Tongrun vs. Sichuan Teway Food | Changshu Tongrun vs. Beijing Sanyuan Foods | Changshu Tongrun vs. Jiajia Food Group | Changshu Tongrun vs. Bus Online Co |
| Shenzhen Glory vs. Lutian Machinery Co | Shenzhen Glory vs. China Longyuan Power | Shenzhen Glory vs. Changshu Tongrun Auto | Shenzhen Glory 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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