Correlation Between Shenzhen Clou and Chongqing Road
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By analyzing existing cross correlation between Shenzhen Clou Electronics and Chongqing Road Bridge, you can compare the effects of market volatilities on Shenzhen Clou and Chongqing Road 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 Chongqing Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Clou and Chongqing Road.
Diversification Opportunities for Shenzhen Clou and Chongqing Road
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shenzhen and Chongqing is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Clou Electronics and Chongqing Road Bridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Road Bridge 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 Chongqing Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Road Bridge has no effect on the direction of Shenzhen Clou i.e., Shenzhen Clou and Chongqing Road go up and down completely randomly.
Pair Corralation between Shenzhen Clou and Chongqing Road
Assuming the 90 days trading horizon Shenzhen Clou Electronics is expected to under-perform the Chongqing Road. But the stock apears to be less risky and, when comparing its historical volatility, Shenzhen Clou Electronics is 1.11 times less risky than Chongqing Road. The stock trades about -0.2 of its potential returns per unit of risk. The Chongqing Road Bridge is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 559.00 in Chongqing Road Bridge on November 1, 2024 and sell it today you would lose (14.00) from holding Chongqing Road Bridge or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Clou Electronics vs. Chongqing Road Bridge
Performance |
| Timeline |
| Shenzhen Clou Electronics |
| Chongqing Road Bridge |
Shenzhen Clou and Chongqing Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Clou and Chongqing Road
The main advantage of trading using opposite Shenzhen Clou and Chongqing Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Clou position performs unexpectedly, Chongqing Road 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 Chongqing Road will offset losses from the drop in Chongqing Road's long position.| Shenzhen Clou vs. Longjian Road Bridge | Shenzhen Clou vs. Fiberhome Telecommunication Technologies | Shenzhen Clou vs. Railway Signal Communication | Shenzhen Clou vs. Bank of Communications |
| Chongqing Road vs. Ningbo Kangqiang Electronics | Chongqing Road vs. Integrated Electronic Systems | Chongqing Road vs. Sihui Fuji Electronics | Chongqing Road vs. Guangzhou Ruoyuchen Information |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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