Correlation Between Shanghai Action and Shenzhen
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By analyzing existing cross correlation between Shanghai Action Education and Shenzhen AV Display Co, you can compare the effects of market volatilities on Shanghai Action and Shenzhen 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 Action with a short position of Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Action and Shenzhen.
Diversification Opportunities for Shanghai Action and Shenzhen
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Shenzhen is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Action Education and Shenzhen AV Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen AV Display and Shanghai Action 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 Action Education are associated (or correlated) with Shenzhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen AV Display has no effect on the direction of Shanghai Action i.e., Shanghai Action and Shenzhen go up and down completely randomly.
Pair Corralation between Shanghai Action and Shenzhen
Assuming the 90 days trading horizon Shanghai Action is expected to generate 1.02 times less return on investment than Shenzhen. But when comparing it to its historical volatility, Shanghai Action Education is 1.3 times less risky than Shenzhen. It trades about 0.04 of its potential returns per unit of risk. Shenzhen AV Display Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,678 in Shenzhen AV Display Co on September 14, 2024 and sell it today you would earn a total of 759.00 from holding Shenzhen AV Display Co or generate 28.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Action Education vs. Shenzhen AV Display Co
Performance |
| Timeline |
| Shanghai Action Education |
| Shenzhen AV Display |
Shanghai Action and Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Action and Shenzhen
The main advantage of trading using opposite Shanghai Action and Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Action position performs unexpectedly, Shenzhen 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 will offset losses from the drop in Shenzhen's long position.| Shanghai Action vs. Kingclean Electric Co | Shanghai Action vs. Daoming OpticsChemical Co | Shanghai Action vs. Lianhe Chemical Technology | Shanghai Action vs. Miracll Chemicals Co |
| Shenzhen vs. Changjiang Publishing Media | Shenzhen vs. Shanghai Action Education | Shenzhen vs. Eastern Communications Co | Shenzhen vs. Xinjiang Communications Construction |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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