Correlation Between Shenzhen MTC and Capitalonline Data

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Can any of the company-specific risk be diversified away by investing in both Shenzhen MTC and Capitalonline Data 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 Shenzhen MTC and Capitalonline Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shenzhen MTC Co and Capitalonline Data Service, you can compare the effects of market volatilities on Shenzhen MTC and Capitalonline Data 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 MTC with a short position of Capitalonline Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen MTC and Capitalonline Data.

Diversification Opportunities for Shenzhen MTC and Capitalonline Data

0.62
  Correlation Coefficient

Poor diversification

The 3 months correlation between Shenzhen and Capitalonline is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen MTC Co and Capitalonline Data Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitalonline Data and Shenzhen MTC 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 MTC Co are associated (or correlated) with Capitalonline Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitalonline Data has no effect on the direction of Shenzhen MTC i.e., Shenzhen MTC and Capitalonline Data go up and down completely randomly.

Pair Corralation between Shenzhen MTC and Capitalonline Data

Assuming the 90 days trading horizon Shenzhen MTC Co is expected to generate 0.88 times more return on investment than Capitalonline Data. However, Shenzhen MTC Co is 1.13 times less risky than Capitalonline Data. It trades about 0.19 of its potential returns per unit of risk. Capitalonline Data Service is currently generating about 0.06 per unit of risk. If you would invest  458.00  in Shenzhen MTC Co on August 5, 2025 and sell it today you would earn a total of  157.00  from holding Shenzhen MTC Co or generate 34.28% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Shenzhen MTC Co  vs.  Capitalonline Data Service

 Performance 
       Timeline  
Shenzhen MTC 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen MTC Co are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shenzhen MTC sustained solid returns over the last few months and may actually be approaching a breakup point.
Capitalonline Data 

Risk-Adjusted Performance

Soft

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Capitalonline Data Service are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Capitalonline Data may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Shenzhen MTC and Capitalonline Data Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Shenzhen MTC and Capitalonline Data

The main advantage of trading using opposite Shenzhen MTC and Capitalonline Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen MTC position performs unexpectedly, Capitalonline Data 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 Capitalonline Data will offset losses from the drop in Capitalonline Data's long position.
The idea behind Shenzhen MTC Co and Capitalonline Data Service pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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