Correlation Between Shanghai Lingyun and Shenzhen
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By analyzing existing cross correlation between Shanghai Lingyun Industries and Shenzhen AV Display Co, you can compare the effects of market volatilities on Shanghai Lingyun and Shenzhen 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 Lingyun with a short position of Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Lingyun and Shenzhen.
Diversification Opportunities for Shanghai Lingyun and Shenzhen
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Shenzhen is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Lingyun Industries and Shenzhen AV Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen AV Display and Shanghai Lingyun 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 Lingyun Industries are associated (or correlated) with Shenzhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen AV Display has no effect on the direction of Shanghai Lingyun i.e., Shanghai Lingyun and Shenzhen go up and down completely randomly.
Pair Corralation between Shanghai Lingyun and Shenzhen
Assuming the 90 days trading horizon Shanghai Lingyun Industries is expected to under-perform the Shenzhen. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Lingyun Industries is 1.0 times less risky than Shenzhen. The stock trades about -0.01 of its potential returns per unit of risk. The Shenzhen AV Display Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,912 in Shenzhen AV Display Co on September 2, 2024 and sell it today you would earn a total of 515.00 from holding Shenzhen AV Display Co or generate 17.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Lingyun Industries vs. Shenzhen AV Display Co
Performance |
| Timeline |
| Shanghai Lingyun Ind |
| Shenzhen AV Display |
Shanghai Lingyun and Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Lingyun and Shenzhen
The main advantage of trading using opposite Shanghai Lingyun and Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Lingyun position performs unexpectedly, Shenzhen 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 will offset losses from the drop in Shenzhen's long position.| Shanghai Lingyun vs. Agricultural Bank of | Shanghai Lingyun vs. Industrial and Commercial | Shanghai Lingyun vs. Bank of China | Shanghai Lingyun vs. PetroChina Co Ltd |
| Shenzhen vs. Cultural Investment Holdings | Shenzhen vs. Gome Telecom Equipment | Shenzhen vs. Bus Online Co | Shenzhen vs. Zotye 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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