Correlation Between Shanghai Newtouch and Shenzhen Bingchuan
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By analyzing existing cross correlation between Shanghai Newtouch Software and Shenzhen Bingchuan Network, you can compare the effects of market volatilities on Shanghai Newtouch and Shenzhen Bingchuan 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 Newtouch with a short position of Shenzhen Bingchuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Newtouch and Shenzhen Bingchuan.
Diversification Opportunities for Shanghai Newtouch and Shenzhen Bingchuan
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Shenzhen is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Newtouch Software and Shenzhen Bingchuan Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Bingchuan and Shanghai Newtouch 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 Newtouch Software are associated (or correlated) with Shenzhen Bingchuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Bingchuan has no effect on the direction of Shanghai Newtouch i.e., Shanghai Newtouch and Shenzhen Bingchuan go up and down completely randomly.
Pair Corralation between Shanghai Newtouch and Shenzhen Bingchuan
Assuming the 90 days trading horizon Shanghai Newtouch Software is expected to generate 0.96 times more return on investment than Shenzhen Bingchuan. However, Shanghai Newtouch Software is 1.04 times less risky than Shenzhen Bingchuan. It trades about 0.03 of its potential returns per unit of risk. Shenzhen Bingchuan Network is currently generating about 0.03 per unit of risk. If you would invest 1,071 in Shanghai Newtouch Software on October 16, 2024 and sell it today you would earn a total of 329.00 from holding Shanghai Newtouch Software or generate 30.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Newtouch Software vs. Shenzhen Bingchuan Network
Performance |
| Timeline |
| Shanghai Newtouch |
| Shenzhen Bingchuan |
Shanghai Newtouch and Shenzhen Bingchuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Newtouch and Shenzhen Bingchuan
The main advantage of trading using opposite Shanghai Newtouch and Shenzhen Bingchuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Newtouch position performs unexpectedly, Shenzhen Bingchuan 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 Bingchuan will offset losses from the drop in Shenzhen Bingchuan's long position.| Shanghai Newtouch vs. China World Trade | Shanghai Newtouch vs. Anyang Iron Steel | Shanghai Newtouch vs. Grandblue Environment Co | Shanghai Newtouch vs. Zhengzhou Qianweiyangchu Food |
| Shenzhen Bingchuan vs. Suzhou Douson Drilling | Shenzhen Bingchuan vs. Pengxin International Mining | Shenzhen Bingchuan vs. Hefei Metalforming Mach | Shenzhen Bingchuan vs. Zhengzhou Coal Mining |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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