Correlation Between Shenzhen MYS and Guangdong Xiongsu
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By analyzing existing cross correlation between Shenzhen MYS Environmental and Guangdong Xiongsu Technology, you can compare the effects of market volatilities on Shenzhen MYS and Guangdong Xiongsu 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 Shenzhen MYS with a short position of Guangdong Xiongsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen MYS and Guangdong Xiongsu.
Diversification Opportunities for Shenzhen MYS and Guangdong Xiongsu
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Guangdong is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen MYS Environmental and Guangdong Xiongsu Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Xiongsu and Shenzhen MYS 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 Shenzhen MYS Environmental are associated (or correlated) with Guangdong Xiongsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Xiongsu has no effect on the direction of Shenzhen MYS i.e., Shenzhen MYS and Guangdong Xiongsu go up and down completely randomly.
Pair Corralation between Shenzhen MYS and Guangdong Xiongsu
Assuming the 90 days trading horizon Shenzhen MYS is expected to generate 1.14 times less return on investment than Guangdong Xiongsu. But when comparing it to its historical volatility, Shenzhen MYS Environmental is 1.27 times less risky than Guangdong Xiongsu. It trades about 0.18 of its potential returns per unit of risk. Guangdong Xiongsu Technology is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 487.00 in Guangdong Xiongsu Technology on September 23, 2024 and sell it today you would earn a total of 252.00 from holding Guangdong Xiongsu Technology or generate 51.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Shenzhen MYS Environmental vs. Guangdong Xiongsu Technology
Performance |
Timeline |
Shenzhen MYS Environ |
Guangdong Xiongsu |
Shenzhen MYS and Guangdong Xiongsu Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shenzhen MYS and Guangdong Xiongsu
The main advantage of trading using opposite Shenzhen MYS and Guangdong Xiongsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen MYS position performs unexpectedly, Guangdong Xiongsu 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 Guangdong Xiongsu will offset losses from the drop in Guangdong Xiongsu's long position.Shenzhen MYS vs. Zijin Mining Group | Shenzhen MYS vs. Wanhua Chemical Group | Shenzhen MYS vs. Baoshan Iron Steel | Shenzhen MYS vs. Shandong Gold Mining |
Guangdong Xiongsu vs. Hubei Dinglong Chemical | Guangdong Xiongsu vs. Yangmei Chemical Co | Guangdong Xiongsu vs. Glodon Software Co | Guangdong Xiongsu vs. Xilong Chemical 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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