Correlation Between Leaguer Shenzhen and Shanghai Shuixing
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By analyzing existing cross correlation between Leaguer Shenzhen MicroElectronics and Shanghai Shuixing Home, you can compare the effects of market volatilities on Leaguer Shenzhen and Shanghai Shuixing 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 Leaguer Shenzhen with a short position of Shanghai Shuixing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leaguer Shenzhen and Shanghai Shuixing.
Diversification Opportunities for Leaguer Shenzhen and Shanghai Shuixing
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Leaguer and Shanghai is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Leaguer Shenzhen MicroElectron and Shanghai Shuixing Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Shuixing Home and Leaguer Shenzhen 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 Leaguer Shenzhen MicroElectronics are associated (or correlated) with Shanghai Shuixing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Shuixing Home has no effect on the direction of Leaguer Shenzhen i.e., Leaguer Shenzhen and Shanghai Shuixing go up and down completely randomly.
Pair Corralation between Leaguer Shenzhen and Shanghai Shuixing
Assuming the 90 days trading horizon Leaguer Shenzhen MicroElectronics is expected to generate 1.3 times more return on investment than Shanghai Shuixing. However, Leaguer Shenzhen is 1.3 times more volatile than Shanghai Shuixing Home. It trades about 0.16 of its potential returns per unit of risk. Shanghai Shuixing Home is currently generating about 0.17 per unit of risk. If you would invest 1,945 in Leaguer Shenzhen MicroElectronics on September 25, 2024 and sell it today you would earn a total of 933.00 from holding Leaguer Shenzhen MicroElectronics or generate 47.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Leaguer Shenzhen MicroElectron vs. Shanghai Shuixing Home
Performance |
Timeline |
Leaguer Shenzhen Mic |
Shanghai Shuixing Home |
Leaguer Shenzhen and Shanghai Shuixing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Leaguer Shenzhen and Shanghai Shuixing
The main advantage of trading using opposite Leaguer Shenzhen and Shanghai Shuixing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leaguer Shenzhen position performs unexpectedly, Shanghai Shuixing 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 Shanghai Shuixing will offset losses from the drop in Shanghai Shuixing's long position.Leaguer Shenzhen vs. Southchip Semiconductor Technology | Leaguer Shenzhen vs. Shanghai Yanpu Metal | Leaguer Shenzhen vs. GRINM Semiconductor Materials | Leaguer Shenzhen vs. Western Metal Materials |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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