Correlation Between Shenzhen Topway and Hunan TV
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By analyzing existing cross correlation between Shenzhen Topway Video and Hunan TV Broadcast, you can compare the effects of market volatilities on Shenzhen Topway and Hunan TV 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 Topway with a short position of Hunan TV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Topway and Hunan TV.
Diversification Opportunities for Shenzhen Topway and Hunan TV
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Hunan is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Topway Video and Hunan TV Broadcast in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan TV Broadcast and Shenzhen Topway 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 Topway Video are associated (or correlated) with Hunan TV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan TV Broadcast has no effect on the direction of Shenzhen Topway i.e., Shenzhen Topway and Hunan TV go up and down completely randomly.
Pair Corralation between Shenzhen Topway and Hunan TV
Assuming the 90 days trading horizon Shenzhen Topway is expected to generate 1.82 times less return on investment than Hunan TV. In addition to that, Shenzhen Topway is 1.1 times more volatile than Hunan TV Broadcast. It trades about 0.02 of its total potential returns per unit of risk. Hunan TV Broadcast is currently generating about 0.03 per unit of volatility. If you would invest 533.00 in Hunan TV Broadcast on October 16, 2024 and sell it today you would earn a total of 149.00 from holding Hunan TV Broadcast or generate 27.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Topway Video vs. Hunan TV Broadcast
Performance |
| Timeline |
| Shenzhen Topway Video |
| Hunan TV Broadcast |
Shenzhen Topway and Hunan TV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Topway and Hunan TV
The main advantage of trading using opposite Shenzhen Topway and Hunan TV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Topway position performs unexpectedly, Hunan TV 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 Hunan TV will offset losses from the drop in Hunan TV's long position.The idea behind Shenzhen Topway Video and Hunan TV Broadcast 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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