Correlation Between Shenzhen Hifuture and Shenzhen Changfang
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By analyzing existing cross correlation between Shenzhen Hifuture Electric and Shenzhen Changfang Light, you can compare the effects of market volatilities on Shenzhen Hifuture and Shenzhen Changfang 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 Shenzhen Changfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Hifuture and Shenzhen Changfang.
Diversification Opportunities for Shenzhen Hifuture and Shenzhen Changfang
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Shenzhen is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Hifuture Electric and Shenzhen Changfang Light in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Changfang Light 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 Shenzhen Changfang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Changfang Light has no effect on the direction of Shenzhen Hifuture i.e., Shenzhen Hifuture and Shenzhen Changfang go up and down completely randomly.
Pair Corralation between Shenzhen Hifuture and Shenzhen Changfang
Assuming the 90 days trading horizon Shenzhen Hifuture Electric is expected to under-perform the Shenzhen Changfang. But the stock apears to be less risky and, when comparing its historical volatility, Shenzhen Hifuture Electric is 1.02 times less risky than Shenzhen Changfang. The stock trades about -0.37 of its potential returns per unit of risk. The Shenzhen Changfang Light is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 179.00 in Shenzhen Changfang Light on October 20, 2024 and sell it today you would earn a total of 14.00 from holding Shenzhen Changfang Light or generate 7.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Hifuture Electric vs. Shenzhen Changfang Light
Performance |
| Timeline |
| Shenzhen Hifuture |
| Shenzhen Changfang Light |
Shenzhen Hifuture and Shenzhen Changfang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Hifuture and Shenzhen Changfang
The main advantage of trading using opposite Shenzhen Hifuture and Shenzhen Changfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Hifuture position performs unexpectedly, Shenzhen Changfang 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 Shenzhen Changfang will offset losses from the drop in Shenzhen Changfang's long position.| Shenzhen Hifuture vs. Anhui Transport Consulting | Shenzhen Hifuture vs. Rising Nonferrous Metals | Shenzhen Hifuture vs. Zhejiang Yongjin Metal | Shenzhen Hifuture vs. Chongqing Shunbo Aluminum |
| Shenzhen Changfang vs. Agricultural Bank of | Shenzhen Changfang vs. Industrial and Commercial | Shenzhen Changfang vs. Bank of China | Shenzhen Changfang vs. China Construction Bank |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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