Correlation Between Fujian Rongji and Shenzhen Glory
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By analyzing existing cross correlation between Fujian Rongji Software and Shenzhen Glory Medical, you can compare the effects of market volatilities on Fujian Rongji and Shenzhen Glory 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 Fujian Rongji with a short position of Shenzhen Glory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Rongji and Shenzhen Glory.
Diversification Opportunities for Fujian Rongji and Shenzhen Glory
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fujian and Shenzhen is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Rongji Software and Shenzhen Glory Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Glory Medical and Fujian Rongji 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 Fujian Rongji Software are associated (or correlated) with Shenzhen Glory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Glory Medical has no effect on the direction of Fujian Rongji i.e., Fujian Rongji and Shenzhen Glory go up and down completely randomly.
Pair Corralation between Fujian Rongji and Shenzhen Glory
Assuming the 90 days trading horizon Fujian Rongji Software is expected to generate 1.3 times more return on investment than Shenzhen Glory. However, Fujian Rongji is 1.3 times more volatile than Shenzhen Glory Medical. It trades about 0.01 of its potential returns per unit of risk. Shenzhen Glory Medical is currently generating about -0.02 per unit of risk. If you would invest 841.00 in Fujian Rongji Software on September 4, 2024 and sell it today you would lose (119.00) from holding Fujian Rongji Software or give up 14.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Rongji Software vs. Shenzhen Glory Medical
Performance |
| Timeline |
| Fujian Rongji Software |
| Shenzhen Glory Medical |
Fujian Rongji and Shenzhen Glory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Rongji and Shenzhen Glory
The main advantage of trading using opposite Fujian Rongji and Shenzhen Glory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Rongji position performs unexpectedly, Shenzhen Glory 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 Glory will offset losses from the drop in Shenzhen Glory's long position.| Fujian Rongji vs. New China Life | Fujian Rongji vs. Ming Yang Smart | Fujian Rongji vs. 159681 | Fujian Rongji vs. 159005 |
| Shenzhen Glory vs. Fujian Rongji Software | Shenzhen Glory vs. Inspur Software Co | Shenzhen Glory vs. Linewell Software Co | Shenzhen Glory vs. Mango Excellent Media |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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