Correlation Between Suzhou Novoprotein and Shenzhen Zhongzhuang
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By analyzing existing cross correlation between Suzhou Novoprotein Scientific and Shenzhen Zhongzhuang Construction, you can compare the effects of market volatilities on Suzhou Novoprotein 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 Suzhou Novoprotein with a short position of Shenzhen Zhongzhuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suzhou Novoprotein and Shenzhen Zhongzhuang.
Diversification Opportunities for Suzhou Novoprotein and Shenzhen Zhongzhuang
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Suzhou and Shenzhen is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Suzhou Novoprotein Scientific and Shenzhen Zhongzhuang Construct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Zhongzhuang and Suzhou Novoprotein 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 Suzhou Novoprotein Scientific 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 Suzhou Novoprotein i.e., Suzhou Novoprotein and Shenzhen Zhongzhuang go up and down completely randomly.
Pair Corralation between Suzhou Novoprotein and Shenzhen Zhongzhuang
Assuming the 90 days trading horizon Suzhou Novoprotein Scientific is expected to under-perform the Shenzhen Zhongzhuang. But the stock apears to be less risky and, when comparing its historical volatility, Suzhou Novoprotein Scientific is 1.19 times less risky than Shenzhen Zhongzhuang. The stock trades about -0.09 of its potential returns per unit of risk. The Shenzhen Zhongzhuang Construction is currently generating about 0.99 of returns per unit of risk over similar time horizon. If you would invest 213.00 in Shenzhen Zhongzhuang Construction on August 29, 2024 and sell it today you would earn a total of 189.00 from holding Shenzhen Zhongzhuang Construction or generate 88.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suzhou Novoprotein Scientific vs. Shenzhen Zhongzhuang Construct
Performance |
| Timeline |
| Suzhou Novoprotein |
| Shenzhen Zhongzhuang |
Suzhou Novoprotein and Shenzhen Zhongzhuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suzhou Novoprotein and Shenzhen Zhongzhuang
The main advantage of trading using opposite Suzhou Novoprotein and Shenzhen Zhongzhuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suzhou Novoprotein 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.| Suzhou Novoprotein vs. Vanfund Urban Investment | Suzhou Novoprotein vs. Luyin Investment Group | Suzhou Novoprotein vs. Hunan Investment Group | Suzhou Novoprotein vs. Shuhua Sports Co |
| Shenzhen Zhongzhuang vs. Ming Yang Smart | Shenzhen Zhongzhuang vs. 159681 | Shenzhen Zhongzhuang vs. 159005 | Shenzhen Zhongzhuang vs. Loctek Ergonomic Technology |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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