Correlation Between Shenzhou International and Pigeon Corp

Can any of the company-specific risk be diversified away by investing in both Shenzhou International and Pigeon Corp 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 Shenzhou International and Pigeon Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shenzhou International Group and Pigeon Corp ADR, you can compare the effects of market volatilities on Shenzhou International and Pigeon Corp 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 Shenzhou International with a short position of Pigeon Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhou International and Pigeon Corp.

Diversification Opportunities for Shenzhou International and Pigeon Corp

-0.66

Correlation Coefficient

Shenzhou International  Pigeon Corp

Excellent diversification

The 3 months correlation between Shenzhou and Pigeon is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhou International Group and Pigeon Corp ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pigeon Corp ADR and Shenzhou International 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 Shenzhou International Group are associated (or correlated) with Pigeon Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pigeon Corp ADR has no effect on the direction of Shenzhou International i.e., Shenzhou International and Pigeon Corp go up and down completely randomly.

Pair Corralation between Shenzhou International and Pigeon Corp

Assuming the 90 days horizon Shenzhou International Group is expected to generate 1.56 times more return on investment than Pigeon Corp. However, Shenzhou International is 1.56 times more volatile than Pigeon Corp ADR. It trades about 0.01 of its potential returns per unit of risk. Pigeon Corp ADR is currently generating about -0.08 per unit of risk. If you would invest  706.00  in Shenzhou International Group on May 7, 2025 and sell it today you would lose (3.00) from holding Shenzhou International Group or give up 0.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Shenzhou International Group  vs.  Pigeon Corp ADR

Shenzhou International

Risk-Adjusted Performance

Weakest

Over the last 90 days Shenzhou International Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, Shenzhou International is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pigeon Corp ADR

Risk-Adjusted Performance

Weakest

Over the last 90 days Pigeon Corp ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Pigeon Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Shenzhou International and Pigeon Corp

The main advantage of trading using opposite Shenzhou International and Pigeon Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhou International position performs unexpectedly, Pigeon Corp 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 Pigeon Corp will offset losses from the drop in Pigeon Corp's long position.

The idea behind Shenzhou International Group and Pigeon Corp ADR 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.