Correlation Between Shanghai Rongtai and Shenzhen MTC
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By analyzing existing cross correlation between Shanghai Rongtai Health and Shenzhen MTC Co, you can compare the effects of market volatilities on Shanghai Rongtai and Shenzhen MTC 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 Rongtai with a short position of Shenzhen MTC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Rongtai and Shenzhen MTC.
Diversification Opportunities for Shanghai Rongtai and Shenzhen MTC
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shanghai and Shenzhen is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Rongtai Health and Shenzhen MTC Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen MTC and Shanghai Rongtai 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 Rongtai Health are associated (or correlated) with Shenzhen MTC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen MTC has no effect on the direction of Shanghai Rongtai i.e., Shanghai Rongtai and Shenzhen MTC go up and down completely randomly.
Pair Corralation between Shanghai Rongtai and Shenzhen MTC
Assuming the 90 days trading horizon Shanghai Rongtai Health is expected to generate 0.75 times more return on investment than Shenzhen MTC. However, Shanghai Rongtai Health is 1.33 times less risky than Shenzhen MTC. It trades about 0.15 of its potential returns per unit of risk. Shenzhen MTC Co is currently generating about -0.02 per unit of risk. If you would invest 1,383 in Shanghai Rongtai Health on August 30, 2024 and sell it today you would earn a total of 81.00 from holding Shanghai Rongtai Health or generate 5.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Rongtai Health vs. Shenzhen MTC Co
Performance |
| Timeline |
| Shanghai Rongtai Health |
| Shenzhen MTC |
Shanghai Rongtai and Shenzhen MTC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Rongtai and Shenzhen MTC
The main advantage of trading using opposite Shanghai Rongtai and Shenzhen MTC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Rongtai position performs unexpectedly, Shenzhen MTC 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 MTC will offset losses from the drop in Shenzhen MTC's long position.| Shanghai Rongtai vs. Cambricon Technologies Corp | Shanghai Rongtai vs. Loongson Technology Corp | Shanghai Rongtai vs. Shenzhen Fortune Trend | Shanghai Rongtai vs. Chongqing Road Bridge |
| Shenzhen MTC vs. Silkroad Visual Technology | Shenzhen MTC vs. Anhui Transport Consulting | Shenzhen MTC vs. Guangdong Jingyi Metal | Shenzhen MTC vs. RoadMain T Co |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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