Correlation Between Shenzhou International and Premier

Can any of the company-specific risk be diversified away by investing in both Shenzhou International and Premier 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 Premier 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 Premier, you can compare the effects of market volatilities on Shenzhou International and Premier 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 Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhou International and Premier.

Diversification Opportunities for Shenzhou International and Premier

-0.15

Correlation Coefficient

Shenzhou International  Premier

Good diversification

The 3 months correlation between Shenzhou and Premier is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhou International Group and Premier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier 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 Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier has no effect on the direction of Shenzhou International i.e., Shenzhou International and Premier go up and down completely randomly.

Pair Corralation between Shenzhou International and Premier

Assuming the 90 days horizon Shenzhou International Group is expected to generate 2.16 times more return on investment than Premier. However, Shenzhou International is 2.16 times more volatile than Premier. It trades about 0.01 of its potential returns per unit of risk. Premier is currently generating about -0.1 per unit of risk. If you would invest  706.00  in Shenzhou International Group on May 7, 2025 and sell it today you would earn a total of  4.00  from holding Shenzhou International Group or generate 0.57% return on investment over 90 days.

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

Shenzhou International Group  vs.  Premier

Shenzhou International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhou International Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Premier

Risk-Adjusted Performance

Very Weak

Over the last 90 days Premier has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Premier is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Shenzhou International and Premier

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

The idea behind Shenzhou International Group and Premier 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.

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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.