Correlation Between Kuangda Technology and Shenzhen Changfang
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By analyzing existing cross correlation between Kuangda Technology Group and Shenzhen Changfang Light, you can compare the effects of market volatilities on Kuangda Technology 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 Kuangda Technology with a short position of Shenzhen Changfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuangda Technology and Shenzhen Changfang.
Diversification Opportunities for Kuangda Technology and Shenzhen Changfang
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kuangda and Shenzhen is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Kuangda Technology Group 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 Kuangda Technology 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 Kuangda Technology Group 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 Kuangda Technology i.e., Kuangda Technology and Shenzhen Changfang go up and down completely randomly.
Pair Corralation between Kuangda Technology and Shenzhen Changfang
Assuming the 90 days trading horizon Kuangda Technology is expected to generate 1.11 times less return on investment than Shenzhen Changfang. But when comparing it to its historical volatility, Kuangda Technology Group is 1.49 times less risky than Shenzhen Changfang. It trades about 0.03 of its potential returns per unit of risk. Shenzhen Changfang Light is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 187.00 in Shenzhen Changfang Light on September 14, 2024 and sell it today you would earn a total of 6.00 from holding Shenzhen Changfang Light or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Kuangda Technology Group vs. Shenzhen Changfang Light
Performance |
| Timeline |
| Kuangda Technology |
| Shenzhen Changfang Light |
Kuangda Technology and Shenzhen Changfang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuangda Technology and Shenzhen Changfang
The main advantage of trading using opposite Kuangda Technology and Shenzhen Changfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuangda Technology 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.| Kuangda Technology vs. Nanjing Putian Telecommunications | Kuangda Technology vs. Tianjin Realty Development | Kuangda Technology vs. Kangyue Technology Co | Kuangda Technology vs. Shenzhen Hifuture Electric |
| Shenzhen Changfang vs. Industrial and Commercial | Shenzhen Changfang vs. Agricultural Bank of | Shenzhen Changfang vs. China Construction Bank | Shenzhen Changfang vs. Bank of China |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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