Correlation Between Guangdong Skychem and Shenzhen MYS
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By analyzing existing cross correlation between Guangdong Skychem Technology and Shenzhen MYS Environmental, you can compare the effects of market volatilities on Guangdong Skychem and Shenzhen MYS 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 Guangdong Skychem with a short position of Shenzhen MYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Skychem and Shenzhen MYS.
Diversification Opportunities for Guangdong Skychem and Shenzhen MYS
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Shenzhen is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Skychem Technology and Shenzhen MYS Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen MYS Environ and Guangdong Skychem 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 Guangdong Skychem Technology are associated (or correlated) with Shenzhen MYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen MYS Environ has no effect on the direction of Guangdong Skychem i.e., Guangdong Skychem and Shenzhen MYS go up and down completely randomly.
Pair Corralation between Guangdong Skychem and Shenzhen MYS
Assuming the 90 days trading horizon Guangdong Skychem Technology is expected to generate 1.63 times more return on investment than Shenzhen MYS. However, Guangdong Skychem is 1.63 times more volatile than Shenzhen MYS Environmental. It trades about 0.05 of its potential returns per unit of risk. Shenzhen MYS Environmental is currently generating about 0.03 per unit of risk. If you would invest 5,469 in Guangdong Skychem Technology on October 16, 2024 and sell it today you would earn a total of 2,691 from holding Guangdong Skychem Technology or generate 49.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Guangdong Skychem Technology vs. Shenzhen MYS Environmental
Performance |
Timeline |
Guangdong Skychem |
Shenzhen MYS Environ |
Guangdong Skychem and Shenzhen MYS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangdong Skychem and Shenzhen MYS
The main advantage of trading using opposite Guangdong Skychem and Shenzhen MYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Skychem position performs unexpectedly, Shenzhen MYS 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 MYS will offset losses from the drop in Shenzhen MYS's long position.Guangdong Skychem vs. Shenzhen MYS Environmental | Guangdong Skychem vs. Runjian Communication Co | Guangdong Skychem vs. Eastern Communications Co | Guangdong Skychem vs. FSPG Hi Tech Co |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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