Correlation Between Hangzhou Huawang and Shenzhen MYS
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By analyzing existing cross correlation between Hangzhou Huawang New and Shenzhen MYS Environmental, you can compare the effects of market volatilities on Hangzhou Huawang and Shenzhen MYS 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 Hangzhou Huawang with a short position of Shenzhen MYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Huawang and Shenzhen MYS.
Diversification Opportunities for Hangzhou Huawang and Shenzhen MYS
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hangzhou and Shenzhen is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Huawang New and Shenzhen MYS Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen MYS Environ and Hangzhou Huawang 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 Hangzhou Huawang New are associated (or correlated) with Shenzhen MYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen MYS Environ has no effect on the direction of Hangzhou Huawang i.e., Hangzhou Huawang and Shenzhen MYS go up and down completely randomly.
Pair Corralation between Hangzhou Huawang and Shenzhen MYS
Assuming the 90 days trading horizon Hangzhou Huawang is expected to generate 4.08 times less return on investment than Shenzhen MYS. But when comparing it to its historical volatility, Hangzhou Huawang New is 1.2 times less risky than Shenzhen MYS. It trades about 0.01 of its potential returns per unit of risk. Shenzhen MYS Environmental is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 271.00 in Shenzhen MYS Environmental on August 29, 2024 and sell it today you would earn a total of 101.00 from holding Shenzhen MYS Environmental or generate 37.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hangzhou Huawang New vs. Shenzhen MYS Environmental
Performance |
| Timeline |
| Hangzhou Huawang New |
| Shenzhen MYS Environ |
Hangzhou Huawang and Shenzhen MYS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hangzhou Huawang and Shenzhen MYS
The main advantage of trading using opposite Hangzhou Huawang and Shenzhen MYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hangzhou Huawang position performs unexpectedly, Shenzhen MYS 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 MYS will offset losses from the drop in Shenzhen MYS's long position.| Hangzhou Huawang vs. Zijin Mining Group | Hangzhou Huawang vs. Wanhua Chemical Group | Hangzhou Huawang vs. Baoshan Iron Steel | Hangzhou Huawang vs. Shandong Gold Mining |
| Shenzhen MYS vs. Gansu Yasheng Industrial | Shenzhen MYS vs. Integrated Electronic Systems | Shenzhen MYS vs. Chengtun Mining Group | Shenzhen MYS vs. Zhejiang Yayi Metal |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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