Correlation Between Changchun BCHT and Shenzhen Sunlord
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By analyzing existing cross correlation between Changchun BCHT Biotechnology and Shenzhen Sunlord Electronics, you can compare the effects of market volatilities on Changchun BCHT and Shenzhen Sunlord 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 Changchun BCHT with a short position of Shenzhen Sunlord. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun BCHT and Shenzhen Sunlord.
Diversification Opportunities for Changchun BCHT and Shenzhen Sunlord
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Changchun and Shenzhen is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Changchun BCHT Biotechnology and Shenzhen Sunlord Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Sunlord Ele and Changchun BCHT 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 Changchun BCHT Biotechnology are associated (or correlated) with Shenzhen Sunlord. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Sunlord Ele has no effect on the direction of Changchun BCHT i.e., Changchun BCHT and Shenzhen Sunlord go up and down completely randomly.
Pair Corralation between Changchun BCHT and Shenzhen Sunlord
Assuming the 90 days trading horizon Changchun BCHT is expected to generate 7.74 times less return on investment than Shenzhen Sunlord. But when comparing it to its historical volatility, Changchun BCHT Biotechnology is 1.0 times less risky than Shenzhen Sunlord. It trades about 0.01 of its potential returns per unit of risk. Shenzhen Sunlord Electronics is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,959 in Shenzhen Sunlord Electronics on September 1, 2024 and sell it today you would earn a total of 147.00 from holding Shenzhen Sunlord Electronics or generate 4.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Changchun BCHT Biotechnology vs. Shenzhen Sunlord Electronics
Performance |
| Timeline |
| Changchun BCHT Biote |
| Shenzhen Sunlord Ele |
Changchun BCHT and Shenzhen Sunlord Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun BCHT and Shenzhen Sunlord
The main advantage of trading using opposite Changchun BCHT and Shenzhen Sunlord positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun BCHT position performs unexpectedly, Shenzhen Sunlord 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 Sunlord will offset losses from the drop in Shenzhen Sunlord's long position.| Changchun BCHT vs. China Petroleum Chemical | Changchun BCHT vs. PetroChina Co Ltd | Changchun BCHT vs. China State Construction | Changchun BCHT vs. China Railway Group |
| Shenzhen Sunlord vs. Puyang Huicheng Electronic | Shenzhen Sunlord vs. Guangdong Wens Foodstuff | Shenzhen Sunlord vs. Kunshan Guoli Electronic | Shenzhen Sunlord vs. Integrated Electronic Systems |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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