Correlation Between Changchun and Shenzhen Transsion
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By analyzing existing cross correlation between Changchun UP Optotech and Shenzhen Transsion Holdings, you can compare the effects of market volatilities on Changchun and Shenzhen Transsion 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 Changchun with a short position of Shenzhen Transsion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun and Shenzhen Transsion.
Diversification Opportunities for Changchun and Shenzhen Transsion
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Changchun and Shenzhen is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Changchun UP Optotech and Shenzhen Transsion Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Transsion and Changchun 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 Changchun UP Optotech are associated (or correlated) with Shenzhen Transsion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Transsion has no effect on the direction of Changchun i.e., Changchun and Shenzhen Transsion go up and down completely randomly.
Pair Corralation between Changchun and Shenzhen Transsion
Assuming the 90 days trading horizon Changchun UP Optotech is expected to generate 0.94 times more return on investment than Shenzhen Transsion. However, Changchun UP Optotech is 1.06 times less risky than Shenzhen Transsion. It trades about 0.08 of its potential returns per unit of risk. Shenzhen Transsion Holdings is currently generating about 0.01 per unit of risk. If you would invest 3,651 in Changchun UP Optotech on December 2, 2024 and sell it today you would earn a total of 249.00 from holding Changchun UP Optotech or generate 6.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun UP Optotech vs. Shenzhen Transsion Holdings
Performance |
| Timeline |
| Changchun UP Optotech |
| Shenzhen Transsion |
Changchun and Shenzhen Transsion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun and Shenzhen Transsion
The main advantage of trading using opposite Changchun and Shenzhen Transsion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun position performs unexpectedly, Shenzhen Transsion 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 Transsion will offset losses from the drop in Shenzhen Transsion's long position.| Changchun vs. TVZone Media Co | Changchun vs. Shanghai Xinhua Media | Changchun vs. Kuang Chi Technologies | Changchun vs. Shanghai Shibei Hi Tech |
| Shenzhen Transsion vs. Hongrun Construction Group | Shenzhen Transsion vs. Lutian Machinery Co | Shenzhen Transsion vs. Jiangsu Yanghe Brewery | Shenzhen Transsion vs. Citic Guoan Wine |
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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