Correlation Between Fujian Newland and ChengDu Hi
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By analyzing existing cross correlation between Fujian Newland Computer and ChengDu Hi Tech Development, you can compare the effects of market volatilities on Fujian Newland and ChengDu Hi 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 Fujian Newland with a short position of ChengDu Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Newland and ChengDu Hi.
Diversification Opportunities for Fujian Newland and ChengDu Hi
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fujian and ChengDu is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Newland Computer and ChengDu Hi Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChengDu Hi Tech and Fujian Newland 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 Fujian Newland Computer are associated (or correlated) with ChengDu Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChengDu Hi Tech has no effect on the direction of Fujian Newland i.e., Fujian Newland and ChengDu Hi go up and down completely randomly.
Pair Corralation between Fujian Newland and ChengDu Hi
Assuming the 90 days trading horizon Fujian Newland Computer is expected to generate 0.77 times more return on investment than ChengDu Hi. However, Fujian Newland Computer is 1.3 times less risky than ChengDu Hi. It trades about 0.09 of its potential returns per unit of risk. ChengDu Hi Tech Development is currently generating about 0.06 per unit of risk. If you would invest 1,497 in Fujian Newland Computer on August 29, 2024 and sell it today you would earn a total of 476.00 from holding Fujian Newland Computer or generate 31.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Newland Computer vs. ChengDu Hi Tech Development
Performance |
| Timeline |
| Fujian Newland Computer |
| ChengDu Hi Tech |
Fujian Newland and ChengDu Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Newland and ChengDu Hi
The main advantage of trading using opposite Fujian Newland and ChengDu Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Newland position performs unexpectedly, ChengDu Hi 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 ChengDu Hi will offset losses from the drop in ChengDu Hi's long position.| Fujian Newland vs. China State Construction | Fujian Newland vs. Huafa Industrial Co | Fujian Newland vs. China International Capital | Fujian Newland vs. Kweichow Moutai Co |
| ChengDu Hi vs. Changchun Faway Automobile | ChengDu Hi vs. Chongqing Changan Automobile | ChengDu Hi vs. Anhui Jianghuai Automobile | ChengDu Hi vs. Dongfeng Automobile Co |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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