Correlation Between Suzhou Mingzhi and ChengDu Hi
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By analyzing existing cross correlation between Suzhou Mingzhi Technology and ChengDu Hi Tech Development, you can compare the effects of market volatilities on Suzhou Mingzhi and ChengDu Hi 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 Mingzhi with a short position of ChengDu Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suzhou Mingzhi and ChengDu Hi.
Diversification Opportunities for Suzhou Mingzhi and ChengDu Hi
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Suzhou and ChengDu is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Suzhou Mingzhi Technology and ChengDu Hi Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChengDu Hi Tech and Suzhou Mingzhi 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 Mingzhi Technology are associated (or correlated) with ChengDu Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChengDu Hi Tech has no effect on the direction of Suzhou Mingzhi i.e., Suzhou Mingzhi and ChengDu Hi go up and down completely randomly.
Pair Corralation between Suzhou Mingzhi and ChengDu Hi
Assuming the 90 days trading horizon Suzhou Mingzhi is expected to generate 1.07 times less return on investment than ChengDu Hi. But when comparing it to its historical volatility, Suzhou Mingzhi Technology is 1.23 times less risky than ChengDu Hi. It trades about 0.07 of its potential returns per unit of risk. ChengDu Hi Tech Development is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,672 in ChengDu Hi Tech Development on August 29, 2024 and sell it today you would earn a total of 1,107 from holding ChengDu Hi Tech Development or generate 23.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suzhou Mingzhi Technology vs. ChengDu Hi Tech Development
Performance |
| Timeline |
| Suzhou Mingzhi Technology |
| ChengDu Hi Tech |
Suzhou Mingzhi and ChengDu Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suzhou Mingzhi and ChengDu Hi
The main advantage of trading using opposite Suzhou Mingzhi and ChengDu Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suzhou Mingzhi position performs unexpectedly, ChengDu Hi 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 ChengDu Hi will offset losses from the drop in ChengDu Hi's long position.| Suzhou Mingzhi vs. Zhejiang Construction Investment | Suzhou Mingzhi vs. Hunan Tyen Machinery | Suzhou Mingzhi vs. Tieling Newcity Investment | Suzhou Mingzhi vs. Tengda Construction Group |
| ChengDu Hi vs. Changchun Faway Automobile | ChengDu Hi vs. Chongqing Changan Automobile | ChengDu Hi vs. Anhui Jianghuai Automobile | ChengDu Hi vs. Dongfeng Automobile Co |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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