Correlation Between Shenzhen Hifuture and Ningbo Kangqiang
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By analyzing existing cross correlation between Shenzhen Hifuture Electric and Ningbo Kangqiang Electronics, you can compare the effects of market volatilities on Shenzhen Hifuture and Ningbo Kangqiang 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 Hifuture with a short position of Ningbo Kangqiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Hifuture and Ningbo Kangqiang.
Diversification Opportunities for Shenzhen Hifuture and Ningbo Kangqiang
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shenzhen and Ningbo is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Hifuture Electric and Ningbo Kangqiang Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Kangqiang Ele and Shenzhen Hifuture 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 Hifuture Electric are associated (or correlated) with Ningbo Kangqiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Kangqiang Ele has no effect on the direction of Shenzhen Hifuture i.e., Shenzhen Hifuture and Ningbo Kangqiang go up and down completely randomly.
Pair Corralation between Shenzhen Hifuture and Ningbo Kangqiang
Assuming the 90 days trading horizon Shenzhen Hifuture is expected to generate 9.69 times less return on investment than Ningbo Kangqiang. But when comparing it to its historical volatility, Shenzhen Hifuture Electric is 1.0 times less risky than Ningbo Kangqiang. It trades about 0.01 of its potential returns per unit of risk. Ningbo Kangqiang Electronics is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,130 in Ningbo Kangqiang Electronics on October 26, 2024 and sell it today you would earn a total of 608.00 from holding Ningbo Kangqiang Electronics or generate 53.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.17% |
| Values | Daily Returns |
Shenzhen Hifuture Electric vs. Ningbo Kangqiang Electronics
Performance |
| Timeline |
| Shenzhen Hifuture |
| Ningbo Kangqiang Ele |
Shenzhen Hifuture and Ningbo Kangqiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Hifuture and Ningbo Kangqiang
The main advantage of trading using opposite Shenzhen Hifuture and Ningbo Kangqiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Hifuture position performs unexpectedly, Ningbo Kangqiang 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 Ningbo Kangqiang will offset losses from the drop in Ningbo Kangqiang's long position.| Shenzhen Hifuture vs. Shenyang Chemical Industry | Shenzhen Hifuture vs. Vohringer Home Technology | Shenzhen Hifuture vs. Xilong Chemical Co | Shenzhen Hifuture vs. Lier Chemical Co |
| Ningbo Kangqiang vs. Cloud Live Technology | Ningbo Kangqiang vs. Nanjing Putian Telecommunications | Ningbo Kangqiang vs. Shenzhen Coship Electronics | Ningbo Kangqiang 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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