Correlation Between Shenzhen Hifuture and Kingnet Network
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By analyzing existing cross correlation between Shenzhen Hifuture Electric and Kingnet Network Co, you can compare the effects of market volatilities on Shenzhen Hifuture and Kingnet Network 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 Kingnet Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Hifuture and Kingnet Network.
Diversification Opportunities for Shenzhen Hifuture and Kingnet Network
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shenzhen and Kingnet is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Hifuture Electric and Kingnet Network Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingnet Network 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 Kingnet Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingnet Network has no effect on the direction of Shenzhen Hifuture i.e., Shenzhen Hifuture and Kingnet Network go up and down completely randomly.
Pair Corralation between Shenzhen Hifuture and Kingnet Network
Assuming the 90 days trading horizon Shenzhen Hifuture Electric is expected to under-perform the Kingnet Network. But the stock apears to be less risky and, when comparing its historical volatility, Shenzhen Hifuture Electric is 1.04 times less risky than Kingnet Network. The stock trades about 0.0 of its potential returns per unit of risk. The Kingnet Network Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 744.00 in Kingnet Network Co on August 28, 2024 and sell it today you would earn a total of 544.00 from holding Kingnet Network Co or generate 73.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Shenzhen Hifuture Electric vs. Kingnet Network Co
Performance |
| Timeline |
| Shenzhen Hifuture |
| Kingnet Network |
Shenzhen Hifuture and Kingnet Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Hifuture and Kingnet Network
The main advantage of trading using opposite Shenzhen Hifuture and Kingnet Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Hifuture position performs unexpectedly, Kingnet Network 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 Kingnet Network will offset losses from the drop in Kingnet Network's long position.The idea behind Shenzhen Hifuture Electric and Kingnet Network Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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