Correlation Between Sichuan Fulin and Shenzhen Changfang
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By analyzing existing cross correlation between Sichuan Fulin Transportation and Shenzhen Changfang Light, you can compare the effects of market volatilities on Sichuan Fulin 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 Sichuan Fulin with a short position of Shenzhen Changfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Fulin and Shenzhen Changfang.
Diversification Opportunities for Sichuan Fulin and Shenzhen Changfang
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sichuan and Shenzhen is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Fulin Transportation 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 Sichuan Fulin 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 Sichuan Fulin Transportation 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 Sichuan Fulin i.e., Sichuan Fulin and Shenzhen Changfang go up and down completely randomly.
Pair Corralation between Sichuan Fulin and Shenzhen Changfang
Assuming the 90 days trading horizon Sichuan Fulin Transportation is expected to under-perform the Shenzhen Changfang. But the stock apears to be less risky and, when comparing its historical volatility, Sichuan Fulin Transportation is 1.02 times less risky than Shenzhen Changfang. The stock trades about -0.05 of its potential returns per unit of risk. The Shenzhen Changfang Light is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 168.00 in Shenzhen Changfang Light on October 23, 2024 and sell it today you would earn a total of 25.00 from holding Shenzhen Changfang Light or generate 14.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Fulin Transportation vs. Shenzhen Changfang Light
Performance |
| Timeline |
| Sichuan Fulin Transp |
| Shenzhen Changfang Light |
Sichuan Fulin and Shenzhen Changfang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Fulin and Shenzhen Changfang
The main advantage of trading using opposite Sichuan Fulin and Shenzhen Changfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Fulin 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.| Sichuan Fulin vs. Digital China Information | Sichuan Fulin vs. Omnijoi Media Corp | Sichuan Fulin vs. Zhuhai Comleader Information | Sichuan Fulin vs. Threes Company Media |
| Shenzhen Changfang vs. Cabio Biotech Wuhan | Shenzhen Changfang vs. De Rucci Healthy | Shenzhen Changfang vs. Anhui Huaren Health | Shenzhen Changfang vs. Jiujiang Shanshui Technology |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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