Correlation Between New Hope and Shenzhen Sunlord
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By analyzing existing cross correlation between New Hope Dairy and Shenzhen Sunlord Electronics, you can compare the effects of market volatilities on New Hope and Shenzhen Sunlord 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 New Hope with a short position of Shenzhen Sunlord. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Hope and Shenzhen Sunlord.
Diversification Opportunities for New Hope and Shenzhen Sunlord
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between New and Shenzhen is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding New Hope Dairy and Shenzhen Sunlord Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Sunlord Ele and New Hope 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 New Hope Dairy are associated (or correlated) with Shenzhen Sunlord. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Sunlord Ele has no effect on the direction of New Hope i.e., New Hope and Shenzhen Sunlord go up and down completely randomly.
Pair Corralation between New Hope and Shenzhen Sunlord
Assuming the 90 days trading horizon New Hope Dairy is expected to generate 2.16 times more return on investment than Shenzhen Sunlord. However, New Hope is 2.16 times more volatile than Shenzhen Sunlord Electronics. It trades about 0.27 of its potential returns per unit of risk. Shenzhen Sunlord Electronics is currently generating about 0.23 per unit of risk. If you would invest 1,240 in New Hope Dairy on September 24, 2024 and sell it today you would earn a total of 260.00 from holding New Hope Dairy or generate 20.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
New Hope Dairy vs. Shenzhen Sunlord Electronics
Performance |
Timeline |
New Hope Dairy |
Shenzhen Sunlord Ele |
New Hope and Shenzhen Sunlord Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with New Hope and Shenzhen Sunlord
The main advantage of trading using opposite New Hope and Shenzhen Sunlord positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Hope position performs unexpectedly, Shenzhen Sunlord 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 Sunlord will offset losses from the drop in Shenzhen Sunlord's long position.New Hope vs. China Railway Construction | New Hope vs. Henan Shuanghui Investment | New Hope vs. Kunwu Jiuding Investment | New Hope vs. Shenzhen Centralcon Investment |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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