Correlation Between Mengtian Home and Shenzhen Clou
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By analyzing existing cross correlation between Mengtian Home Group and Shenzhen Clou Electronics, you can compare the effects of market volatilities on Mengtian Home and Shenzhen Clou 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 Mengtian Home with a short position of Shenzhen Clou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mengtian Home and Shenzhen Clou.
Diversification Opportunities for Mengtian Home and Shenzhen Clou
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mengtian and Shenzhen is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Mengtian Home Group and Shenzhen Clou Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Clou Electronics and Mengtian Home 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 Mengtian Home Group are associated (or correlated) with Shenzhen Clou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Clou Electronics has no effect on the direction of Mengtian Home i.e., Mengtian Home and Shenzhen Clou go up and down completely randomly.
Pair Corralation between Mengtian Home and Shenzhen Clou
Assuming the 90 days trading horizon Mengtian Home Group is expected to generate 0.98 times more return on investment than Shenzhen Clou. However, Mengtian Home Group is 1.02 times less risky than Shenzhen Clou. It trades about 0.0 of its potential returns per unit of risk. Shenzhen Clou Electronics is currently generating about -0.04 per unit of risk. If you would invest 1,398 in Mengtian Home Group on November 30, 2024 and sell it today you would lose (202.00) from holding Mengtian Home Group or give up 14.45% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Mengtian Home Group vs. Shenzhen Clou Electronics
Performance |
Timeline |
Mengtian Home Group |
Shenzhen Clou Electronics |
Mengtian Home and Shenzhen Clou Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mengtian Home and Shenzhen Clou
The main advantage of trading using opposite Mengtian Home and Shenzhen Clou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mengtian Home position performs unexpectedly, Shenzhen Clou 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 Clou will offset losses from the drop in Shenzhen Clou's long position.Mengtian Home vs. Bomesc Offshore Engineering | ||
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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