Correlation Between Shanghai Yanpu and Shenzhen Zhongzhuang
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By analyzing existing cross correlation between Shanghai Yanpu Metal and Shenzhen Zhongzhuang Construction, you can compare the effects of market volatilities on Shanghai Yanpu and Shenzhen Zhongzhuang 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 Yanpu with a short position of Shenzhen Zhongzhuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yanpu and Shenzhen Zhongzhuang.
Diversification Opportunities for Shanghai Yanpu and Shenzhen Zhongzhuang
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Shenzhen is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yanpu Metal and Shenzhen Zhongzhuang Construct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Zhongzhuang and Shanghai Yanpu 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 Yanpu Metal are associated (or correlated) with Shenzhen Zhongzhuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Zhongzhuang has no effect on the direction of Shanghai Yanpu i.e., Shanghai Yanpu and Shenzhen Zhongzhuang go up and down completely randomly.
Pair Corralation between Shanghai Yanpu and Shenzhen Zhongzhuang
Assuming the 90 days trading horizon Shanghai Yanpu Metal is expected to under-perform the Shenzhen Zhongzhuang. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Yanpu Metal is 1.19 times less risky than Shenzhen Zhongzhuang. The stock trades about -0.02 of its potential returns per unit of risk. The Shenzhen Zhongzhuang Construction is currently generating about 1.05 of returns per unit of risk over similar time horizon. If you would invest 193.00 in Shenzhen Zhongzhuang Construction on August 25, 2024 and sell it today you would earn a total of 186.00 from holding Shenzhen Zhongzhuang Construction or generate 96.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Yanpu Metal vs. Shenzhen Zhongzhuang Construct
Performance |
| Timeline |
| Shanghai Yanpu Metal |
| Shenzhen Zhongzhuang |
Shanghai Yanpu and Shenzhen Zhongzhuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Yanpu and Shenzhen Zhongzhuang
The main advantage of trading using opposite Shanghai Yanpu and Shenzhen Zhongzhuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yanpu position performs unexpectedly, Shenzhen Zhongzhuang 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 Zhongzhuang will offset losses from the drop in Shenzhen Zhongzhuang's long position.| Shanghai Yanpu vs. Kweichow Moutai Co | Shanghai Yanpu vs. Contemporary Amperex Technology | Shanghai Yanpu vs. G bits Network Technology | Shanghai Yanpu vs. Beijing Roborock Technology |
| Shenzhen Zhongzhuang vs. Chengdu Kanghua Biological | Shenzhen Zhongzhuang vs. Beijing Wantai Biological | Shenzhen Zhongzhuang vs. Suzhou Novoprotein Scientific | Shenzhen Zhongzhuang vs. Aluminum Corp of |
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 CEOs Directory module to screen CEOs from public companies around the world.
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