Correlation Between Shenwu Energy and Fujian Longzhou
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By analyzing existing cross correlation between Shenwu Energy Saving and Fujian Longzhou Transportation, you can compare the effects of market volatilities on Shenwu Energy and Fujian Longzhou 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 Shenwu Energy with a short position of Fujian Longzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenwu Energy and Fujian Longzhou.
Diversification Opportunities for Shenwu Energy and Fujian Longzhou
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shenwu and Fujian is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Shenwu Energy Saving and Fujian Longzhou Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Longzhou Tran and Shenwu Energy 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 Shenwu Energy Saving are associated (or correlated) with Fujian Longzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Longzhou Tran has no effect on the direction of Shenwu Energy i.e., Shenwu Energy and Fujian Longzhou go up and down completely randomly.
Pair Corralation between Shenwu Energy and Fujian Longzhou
Assuming the 90 days trading horizon Shenwu Energy Saving is expected to under-perform the Fujian Longzhou. But the stock apears to be less risky and, when comparing its historical volatility, Shenwu Energy Saving is 1.03 times less risky than Fujian Longzhou. The stock trades about -0.01 of its potential returns per unit of risk. The Fujian Longzhou Transportation is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 398.00 in Fujian Longzhou Transportation on January 26, 2025 and sell it today you would earn a total of 10.00 from holding Fujian Longzhou Transportation or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenwu Energy Saving vs. Fujian Longzhou Transportation
Performance |
| Timeline |
| Shenwu Energy Saving |
| Fujian Longzhou Tran |
Shenwu Energy and Fujian Longzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenwu Energy and Fujian Longzhou
The main advantage of trading using opposite Shenwu Energy and Fujian Longzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenwu Energy position performs unexpectedly, Fujian Longzhou 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 Fujian Longzhou will offset losses from the drop in Fujian Longzhou's long position.| Shenwu Energy vs. Xiamen Insight Investment | Shenwu Energy vs. Luyin Investment Group | Shenwu Energy vs. Advanced Technology Materials | Shenwu Energy vs. Jilin OLED Material |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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