Correlation Between Shenzhen Clou and Fuzhou Rockchip
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By analyzing existing cross correlation between Shenzhen Clou Electronics and Fuzhou Rockchip Electronics, you can compare the effects of market volatilities on Shenzhen Clou and Fuzhou Rockchip 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 Fuzhou Rockchip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Clou and Fuzhou Rockchip.
Diversification Opportunities for Shenzhen Clou and Fuzhou Rockchip
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Fuzhou is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Clou Electronics and Fuzhou Rockchip Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuzhou Rockchip Elec 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 Fuzhou Rockchip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuzhou Rockchip Elec has no effect on the direction of Shenzhen Clou i.e., Shenzhen Clou and Fuzhou Rockchip go up and down completely randomly.
Pair Corralation between Shenzhen Clou and Fuzhou Rockchip
Assuming the 90 days trading horizon Shenzhen Clou Electronics is expected to generate 1.2 times more return on investment than Fuzhou Rockchip. However, Shenzhen Clou is 1.2 times more volatile than Fuzhou Rockchip Electronics. It trades about 0.16 of its potential returns per unit of risk. Fuzhou Rockchip Electronics is currently generating about 0.04 per unit of risk. If you would invest 446.00 in Shenzhen Clou Electronics on September 13, 2024 and sell it today you would earn a total of 53.00 from holding Shenzhen Clou Electronics or generate 11.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Clou Electronics vs. Fuzhou Rockchip Electronics
Performance |
| Timeline |
| Shenzhen Clou Electronics |
| Fuzhou Rockchip Elec |
Shenzhen Clou and Fuzhou Rockchip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Clou and Fuzhou Rockchip
The main advantage of trading using opposite Shenzhen Clou and Fuzhou Rockchip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Clou position performs unexpectedly, Fuzhou Rockchip 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 Fuzhou Rockchip will offset losses from the drop in Fuzhou Rockchip's long position.| Shenzhen Clou vs. Industrial and Commercial | Shenzhen Clou vs. Agricultural Bank of | Shenzhen Clou vs. China Construction Bank | Shenzhen Clou vs. Bank of China |
| Fuzhou Rockchip vs. Nanjing Putian Telecommunications | Fuzhou Rockchip vs. Tianjin Realty Development | Fuzhou Rockchip vs. Kangyue Technology Co | Fuzhou Rockchip vs. Shenzhen Hifuture Electric |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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