Correlation Between Shanghai Rendu and Shenzhen Clou
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By analyzing existing cross correlation between Shanghai Rendu Biotechnology and Shenzhen Clou Electronics, you can compare the effects of market volatilities on Shanghai Rendu and Shenzhen Clou 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 Rendu with a short position of Shenzhen Clou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Rendu and Shenzhen Clou.
Diversification Opportunities for Shanghai Rendu and Shenzhen Clou
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Shenzhen is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Rendu Biotechnology and Shenzhen Clou Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Clou Electronics and Shanghai Rendu 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 Rendu Biotechnology are associated (or correlated) with Shenzhen Clou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Clou Electronics has no effect on the direction of Shanghai Rendu i.e., Shanghai Rendu and Shenzhen Clou go up and down completely randomly.
Pair Corralation between Shanghai Rendu and Shenzhen Clou
Assuming the 90 days trading horizon Shanghai Rendu Biotechnology is expected to under-perform the Shenzhen Clou. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Rendu Biotechnology is 1.21 times less risky than Shenzhen Clou. The stock trades about -0.06 of its potential returns per unit of risk. The Shenzhen Clou Electronics is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 446.00 in Shenzhen Clou Electronics on September 13, 2024 and sell it today you would earn a total of 53.00 from holding Shenzhen Clou Electronics or generate 11.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Rendu Biotechnology vs. Shenzhen Clou Electronics
Performance |
| Timeline |
| Shanghai Rendu Biote |
| Shenzhen Clou Electronics |
Shanghai Rendu and Shenzhen Clou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Rendu and Shenzhen Clou
The main advantage of trading using opposite Shanghai Rendu and Shenzhen Clou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Rendu position performs unexpectedly, Shenzhen Clou 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 Clou will offset losses from the drop in Shenzhen Clou's long position.| Shanghai Rendu vs. Industrial and Commercial | Shanghai Rendu vs. China Construction Bank | Shanghai Rendu vs. Bank of China | Shanghai Rendu vs. Agricultural Bank of |
| Shenzhen Clou vs. Industrial and Commercial | Shenzhen Clou vs. Agricultural Bank of | Shenzhen Clou vs. China Construction Bank | Shenzhen Clou vs. Bank of China |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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