Correlation Between Sino Land and Shenzhen Investment
Can any of the company-specific risk be diversified away by investing in both Sino Land and Shenzhen Investment at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sino Land and Shenzhen Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sino Land and Shenzhen Investment Limited, you can compare the effects of market volatilities on Sino Land and Shenzhen Investment 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 Sino Land with a short position of Shenzhen Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino Land and Shenzhen Investment.
Diversification Opportunities for Sino Land and Shenzhen Investment
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sino and Shenzhen is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Sino Land and Shenzhen Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Investment and Sino Land 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 Sino Land are associated (or correlated) with Shenzhen Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Investment has no effect on the direction of Sino Land i.e., Sino Land and Shenzhen Investment go up and down completely randomly.
Pair Corralation between Sino Land and Shenzhen Investment
Assuming the 90 days horizon Sino Land is expected to generate 0.7 times more return on investment than Shenzhen Investment. However, Sino Land is 1.43 times less risky than Shenzhen Investment. It trades about 0.08 of its potential returns per unit of risk. Shenzhen Investment Limited is currently generating about 0.04 per unit of risk. If you would invest 54.00 in Sino Land on October 12, 2024 and sell it today you would earn a total of 41.00 from holding Sino Land or generate 75.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sino Land vs. Shenzhen Investment Limited
Performance |
| Timeline |
| Sino Land |
| Shenzhen Investment |
Sino Land and Shenzhen Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sino Land and Shenzhen Investment
The main advantage of trading using opposite Sino Land and Shenzhen Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sino Land position performs unexpectedly, Shenzhen Investment 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 Investment will offset losses from the drop in Shenzhen Investment's long position.| Sino Land vs. THORNEY TECHS LTD | Sino Land vs. Salesforce | Sino Land vs. TRADEGATE | Sino Land vs. Bio Techne Corp |
| Shenzhen Investment vs. Easy Software AG | Shenzhen Investment vs. Tyson Foods | Shenzhen Investment vs. Thai Beverage Public | Shenzhen Investment vs. Take Two Interactive 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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