Correlation Between Shenzhen Hifuture and Shanghai Shuixing
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By analyzing existing cross correlation between Shenzhen Hifuture Electric and Shanghai Shuixing Home, you can compare the effects of market volatilities on Shenzhen Hifuture and Shanghai Shuixing 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 Shanghai Shuixing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Hifuture and Shanghai Shuixing.
Diversification Opportunities for Shenzhen Hifuture and Shanghai Shuixing
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shenzhen and Shanghai is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Hifuture Electric and Shanghai Shuixing Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Shuixing Home 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 Shanghai Shuixing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Shuixing Home has no effect on the direction of Shenzhen Hifuture i.e., Shenzhen Hifuture and Shanghai Shuixing go up and down completely randomly.
Pair Corralation between Shenzhen Hifuture and Shanghai Shuixing
Assuming the 90 days trading horizon Shenzhen Hifuture is expected to generate 1.28 times less return on investment than Shanghai Shuixing. But when comparing it to its historical volatility, Shenzhen Hifuture Electric is 1.35 times less risky than Shanghai Shuixing. It trades about 0.35 of its potential returns per unit of risk. Shanghai Shuixing Home is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,388 in Shanghai Shuixing Home on September 14, 2024 and sell it today you would earn a total of 416.00 from holding Shanghai Shuixing Home or generate 29.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Hifuture Electric vs. Shanghai Shuixing Home
Performance |
| Timeline |
| Shenzhen Hifuture |
| Shanghai Shuixing Home |
Shenzhen Hifuture and Shanghai Shuixing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Hifuture and Shanghai Shuixing
The main advantage of trading using opposite Shenzhen Hifuture and Shanghai Shuixing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Hifuture position performs unexpectedly, Shanghai Shuixing 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 Shanghai Shuixing will offset losses from the drop in Shanghai Shuixing's long position.| Shenzhen Hifuture vs. Agricultural Bank of | Shenzhen Hifuture vs. Industrial and Commercial | Shenzhen Hifuture vs. Bank of China | Shenzhen Hifuture vs. PetroChina Co Ltd |
| Shanghai Shuixing vs. Nanjing Putian Telecommunications | Shanghai Shuixing vs. Tianjin Realty Development | Shanghai Shuixing vs. Kangyue Technology Co | Shanghai Shuixing 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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