Correlation Between Shanghai Newtouch and Shenzhen Mindray
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By analyzing existing cross correlation between Shanghai Newtouch Software and Shenzhen Mindray Bio Medical, you can compare the effects of market volatilities on Shanghai Newtouch and Shenzhen Mindray 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 Mindray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Newtouch and Shenzhen Mindray.
Diversification Opportunities for Shanghai Newtouch and Shenzhen Mindray
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shanghai and Shenzhen is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Newtouch Software and Shenzhen Mindray Bio Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Mindray Bio 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 Mindray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Mindray Bio has no effect on the direction of Shanghai Newtouch i.e., Shanghai Newtouch and Shenzhen Mindray go up and down completely randomly.
Pair Corralation between Shanghai Newtouch and Shenzhen Mindray
Assuming the 90 days trading horizon Shanghai Newtouch Software is expected to generate 2.31 times more return on investment than Shenzhen Mindray. However, Shanghai Newtouch is 2.31 times more volatile than Shenzhen Mindray Bio Medical. It trades about 0.03 of its potential returns per unit of risk. Shenzhen Mindray Bio Medical 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Newtouch Software vs. Shenzhen Mindray Bio Medical
Performance |
| Timeline |
| Shanghai Newtouch |
| Shenzhen Mindray Bio |
Shanghai Newtouch and Shenzhen Mindray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Newtouch and Shenzhen Mindray
The main advantage of trading using opposite Shanghai Newtouch and Shenzhen Mindray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Newtouch position performs unexpectedly, Shenzhen Mindray 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 Mindray will offset losses from the drop in Shenzhen Mindray'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 Mindray vs. Beijing Baolande Software | Shenzhen Mindray vs. Inspur Software Co | Shenzhen Mindray vs. Ningbo MedicalSystem Biotechnology | Shenzhen Mindray vs. Shanghai Newtouch Software |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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