Correlation Between Shenzhen Clou and Weihai Honglin
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By analyzing existing cross correlation between Shenzhen Clou Electronics and Weihai Honglin Electronic, you can compare the effects of market volatilities on Shenzhen Clou and Weihai Honglin 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 Clou with a short position of Weihai Honglin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Clou and Weihai Honglin.
Diversification Opportunities for Shenzhen Clou and Weihai Honglin
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shenzhen and Weihai is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Clou Electronics and Weihai Honglin Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weihai Honglin Electronic and Shenzhen Clou 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 Clou Electronics are associated (or correlated) with Weihai Honglin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weihai Honglin Electronic has no effect on the direction of Shenzhen Clou i.e., Shenzhen Clou and Weihai Honglin go up and down completely randomly.
Pair Corralation between Shenzhen Clou and Weihai Honglin
Assuming the 90 days trading horizon Shenzhen Clou Electronics is expected to generate 1.03 times more return on investment than Weihai Honglin. However, Shenzhen Clou is 1.03 times more volatile than Weihai Honglin Electronic. It trades about 0.14 of its potential returns per unit of risk. Weihai Honglin Electronic is currently generating about 0.11 per unit of risk. If you would invest 344.00 in Shenzhen Clou Electronics on August 29, 2024 and sell it today you would earn a total of 99.00 from holding Shenzhen Clou Electronics or generate 28.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Clou Electronics vs. Weihai Honglin Electronic
Performance |
| Timeline |
| Shenzhen Clou Electronics |
| Weihai Honglin Electronic |
Shenzhen Clou and Weihai Honglin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Clou and Weihai Honglin
The main advantage of trading using opposite Shenzhen Clou and Weihai Honglin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Clou position performs unexpectedly, Weihai Honglin 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 Weihai Honglin will offset losses from the drop in Weihai Honglin's long position.| Shenzhen Clou vs. PetroChina Co Ltd | Shenzhen Clou vs. China State Construction | Shenzhen Clou vs. China Mobile Limited | Shenzhen Clou vs. Industrial and Commercial |
| Weihai Honglin vs. PetroChina Co Ltd | Weihai Honglin vs. China State Construction | Weihai Honglin vs. China Mobile Limited | Weihai Honglin vs. Industrial and Commercial |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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