Correlation Between Suzhou Mingzhi and Shandong Sinoglory
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By analyzing existing cross correlation between Suzhou Mingzhi Technology and Shandong Sinoglory Health, you can compare the effects of market volatilities on Suzhou Mingzhi and Shandong Sinoglory 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 Shandong Sinoglory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suzhou Mingzhi and Shandong Sinoglory.
Diversification Opportunities for Suzhou Mingzhi and Shandong Sinoglory
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Suzhou and Shandong is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Suzhou Mingzhi Technology and Shandong Sinoglory Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Sinoglory Health 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 Shandong Sinoglory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Sinoglory Health has no effect on the direction of Suzhou Mingzhi i.e., Suzhou Mingzhi and Shandong Sinoglory go up and down completely randomly.
Pair Corralation between Suzhou Mingzhi and Shandong Sinoglory
Assuming the 90 days trading horizon Suzhou Mingzhi Technology is expected to generate 1.47 times more return on investment than Shandong Sinoglory. However, Suzhou Mingzhi is 1.47 times more volatile than Shandong Sinoglory Health. It trades about -0.01 of its potential returns per unit of risk. Shandong Sinoglory Health is currently generating about -0.03 per unit of risk. If you would invest 2,828 in Suzhou Mingzhi Technology on November 8, 2024 and sell it today you would lose (1,019) from holding Suzhou Mingzhi Technology or give up 36.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suzhou Mingzhi Technology vs. Shandong Sinoglory Health
Performance |
| Timeline |
| Suzhou Mingzhi Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shandong Sinoglory Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Suzhou Mingzhi and Shandong Sinoglory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suzhou Mingzhi and Shandong Sinoglory
The main advantage of trading using opposite Suzhou Mingzhi and Shandong Sinoglory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suzhou Mingzhi position performs unexpectedly, Shandong Sinoglory 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 Shandong Sinoglory will offset losses from the drop in Shandong Sinoglory's long position.The idea behind Suzhou Mingzhi Technology and Shandong Sinoglory Health 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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