Correlation Between Shenzhen Transsion and NBTM New
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By analyzing existing cross correlation between Shenzhen Transsion Holdings and NBTM New Materials, you can compare the effects of market volatilities on Shenzhen Transsion and NBTM New 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 Shenzhen Transsion with a short position of NBTM New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Transsion and NBTM New.
Diversification Opportunities for Shenzhen Transsion and NBTM New
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and NBTM is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Transsion Holdings and NBTM New Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBTM New Materials and Shenzhen Transsion 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 Shenzhen Transsion Holdings are associated (or correlated) with NBTM New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBTM New Materials has no effect on the direction of Shenzhen Transsion i.e., Shenzhen Transsion and NBTM New go up and down completely randomly.
Pair Corralation between Shenzhen Transsion and NBTM New
Assuming the 90 days trading horizon Shenzhen Transsion Holdings is expected to generate 0.89 times more return on investment than NBTM New. However, Shenzhen Transsion Holdings is 1.12 times less risky than NBTM New. It trades about 0.39 of its potential returns per unit of risk. NBTM New Materials is currently generating about 0.29 per unit of risk. If you would invest 8,667 in Shenzhen Transsion Holdings on November 7, 2024 and sell it today you would earn a total of 1,372 from holding Shenzhen Transsion Holdings or generate 15.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Transsion Holdings vs. NBTM New Materials
Performance |
| Timeline |
| Shenzhen Transsion |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| NBTM New Materials |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shenzhen Transsion and NBTM New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Transsion and NBTM New
The main advantage of trading using opposite Shenzhen Transsion and NBTM New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Transsion position performs unexpectedly, NBTM New 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 NBTM New will offset losses from the drop in NBTM New's long position.The idea behind Shenzhen Transsion Holdings and NBTM New Materials pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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