Correlation Between Shenzhen Hifuture and Cambricon Technologies
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By analyzing existing cross correlation between Shenzhen Hifuture Electric and Cambricon Technologies Corp, you can compare the effects of market volatilities on Shenzhen Hifuture and Cambricon Technologies 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 Cambricon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Hifuture and Cambricon Technologies.
Diversification Opportunities for Shenzhen Hifuture and Cambricon Technologies
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shenzhen and Cambricon is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Hifuture Electric and Cambricon Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambricon Technologies 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 Cambricon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambricon Technologies has no effect on the direction of Shenzhen Hifuture i.e., Shenzhen Hifuture and Cambricon Technologies go up and down completely randomly.
Pair Corralation between Shenzhen Hifuture and Cambricon Technologies
Assuming the 90 days trading horizon Shenzhen Hifuture is expected to generate 1.03 times less return on investment than Cambricon Technologies. But when comparing it to its historical volatility, Shenzhen Hifuture Electric is 1.29 times less risky than Cambricon Technologies. It trades about 0.32 of its potential returns per unit of risk. Cambricon Technologies Corp is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 46,900 in Cambricon Technologies Corp on September 15, 2024 and sell it today you would earn a total of 9,900 from holding Cambricon Technologies Corp or generate 21.11% 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. Cambricon Technologies Corp
Performance |
| Timeline |
| Shenzhen Hifuture |
| Cambricon Technologies |
Shenzhen Hifuture and Cambricon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Hifuture and Cambricon Technologies
The main advantage of trading using opposite Shenzhen Hifuture and Cambricon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Hifuture position performs unexpectedly, Cambricon Technologies 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 Cambricon Technologies will offset losses from the drop in Cambricon Technologies' long position.| Shenzhen Hifuture vs. Hubei Geoway Investment | Shenzhen Hifuture vs. Ningbo Thermal Power | Shenzhen Hifuture vs. Xinjiang Baodi Mining | Shenzhen Hifuture vs. Ye Chiu Metal |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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