Correlation Between Shanghai Shuixing and Shenzhen Noposion
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By analyzing existing cross correlation between Shanghai Shuixing Home and Shenzhen Noposion Agrochemicals, you can compare the effects of market volatilities on Shanghai Shuixing and Shenzhen Noposion 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 Shuixing with a short position of Shenzhen Noposion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Shuixing and Shenzhen Noposion.
Diversification Opportunities for Shanghai Shuixing and Shenzhen Noposion
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Shenzhen is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Shuixing Home and Shenzhen Noposion Agrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Noposion and Shanghai Shuixing 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 Shuixing Home are associated (or correlated) with Shenzhen Noposion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Noposion has no effect on the direction of Shanghai Shuixing i.e., Shanghai Shuixing and Shenzhen Noposion go up and down completely randomly.
Pair Corralation between Shanghai Shuixing and Shenzhen Noposion
Assuming the 90 days trading horizon Shanghai Shuixing is expected to generate 2.35 times less return on investment than Shenzhen Noposion. But when comparing it to its historical volatility, Shanghai Shuixing Home is 1.18 times less risky than Shenzhen Noposion. It trades about 0.03 of its potential returns per unit of risk. Shenzhen Noposion Agrochemicals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 619.00 in Shenzhen Noposion Agrochemicals on November 1, 2024 and sell it today you would earn a total of 368.00 from holding Shenzhen Noposion Agrochemicals or generate 59.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Shuixing Home vs. Shenzhen Noposion Agrochemical
Performance |
| Timeline |
| Shanghai Shuixing Home |
| Shenzhen Noposion |
Shanghai Shuixing and Shenzhen Noposion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Shuixing and Shenzhen Noposion
The main advantage of trading using opposite Shanghai Shuixing and Shenzhen Noposion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Shuixing position performs unexpectedly, Shenzhen Noposion 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 Noposion will offset losses from the drop in Shenzhen Noposion's long position.| Shanghai Shuixing vs. Tinavi Medical Technologies | Shanghai Shuixing vs. Sino Medical Sciences | Shanghai Shuixing vs. Eyebright Medical Technology | Shanghai Shuixing vs. Wintao Communications Co |
| Shenzhen Noposion vs. Gan Yuan Foods | Shenzhen Noposion vs. Zhongjing Food Co | Shenzhen Noposion vs. Shanghai Shuixing Home | Shenzhen Noposion vs. Zhangjiagang Elegant Home |
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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