Correlation Between Shenzhen Fortune and Shanghai Shuixing
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By analyzing existing cross correlation between Shenzhen Fortune Trend and Shanghai Shuixing Home, you can compare the effects of market volatilities on Shenzhen Fortune 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 Shenzhen Fortune with a short position of Shanghai Shuixing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Fortune and Shanghai Shuixing.
Diversification Opportunities for Shenzhen Fortune and Shanghai Shuixing
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Shanghai is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Fortune Trend 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 Shenzhen Fortune 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 Fortune Trend 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 Shenzhen Fortune i.e., Shenzhen Fortune and Shanghai Shuixing go up and down completely randomly.
Pair Corralation between Shenzhen Fortune and Shanghai Shuixing
Assuming the 90 days trading horizon Shenzhen Fortune Trend is expected to generate 2.0 times more return on investment than Shanghai Shuixing. However, Shenzhen Fortune is 2.0 times more volatile than Shanghai Shuixing Home. It trades about 0.2 of its potential returns per unit of risk. Shanghai Shuixing Home is currently generating about 0.19 per unit of risk. If you would invest 8,935 in Shenzhen Fortune Trend on September 23, 2024 and sell it today you would earn a total of 10,006 from holding Shenzhen Fortune Trend or generate 111.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Shenzhen Fortune Trend vs. Shanghai Shuixing Home
Performance |
Timeline |
Shenzhen Fortune Trend |
Shanghai Shuixing Home |
Shenzhen Fortune and Shanghai Shuixing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shenzhen Fortune and Shanghai Shuixing
The main advantage of trading using opposite Shenzhen Fortune and Shanghai Shuixing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Fortune 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.Shenzhen Fortune vs. Industrial and Commercial | Shenzhen Fortune vs. Agricultural Bank of | Shenzhen Fortune vs. China Construction Bank | Shenzhen Fortune vs. Bank of China |
Shanghai Shuixing vs. Cambricon Technologies Corp | Shanghai Shuixing vs. Loongson Technology Corp | Shanghai Shuixing vs. Shenzhen Fortune Trend | Shanghai Shuixing vs. Chongqing Road Bridge |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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