Correlation Between Shenzhen Glory and Fuzhou Rockchip
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By analyzing existing cross correlation between Shenzhen Glory Medical and Fuzhou Rockchip Electronics, you can compare the effects of market volatilities on Shenzhen Glory and Fuzhou Rockchip 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 Glory with a short position of Fuzhou Rockchip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Glory and Fuzhou Rockchip.
Diversification Opportunities for Shenzhen Glory and Fuzhou Rockchip
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shenzhen and Fuzhou is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Glory Medical and Fuzhou Rockchip Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuzhou Rockchip Elec and Shenzhen Glory 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 Glory Medical are associated (or correlated) with Fuzhou Rockchip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuzhou Rockchip Elec has no effect on the direction of Shenzhen Glory i.e., Shenzhen Glory and Fuzhou Rockchip go up and down completely randomly.
Pair Corralation between Shenzhen Glory and Fuzhou Rockchip
Assuming the 90 days trading horizon Shenzhen Glory is expected to generate 1.43 times less return on investment than Fuzhou Rockchip. But when comparing it to its historical volatility, Shenzhen Glory Medical is 1.13 times less risky than Fuzhou Rockchip. It trades about 0.09 of its potential returns per unit of risk. Fuzhou Rockchip Electronics is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,686 in Fuzhou Rockchip Electronics on September 2, 2024 and sell it today you would earn a total of 2,743 from holding Fuzhou Rockchip Electronics or generate 48.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Glory Medical vs. Fuzhou Rockchip Electronics
Performance |
| Timeline |
| Shenzhen Glory Medical |
| Fuzhou Rockchip Elec |
Shenzhen Glory and Fuzhou Rockchip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Glory and Fuzhou Rockchip
The main advantage of trading using opposite Shenzhen Glory and Fuzhou Rockchip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Glory position performs unexpectedly, Fuzhou Rockchip 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 Fuzhou Rockchip will offset losses from the drop in Fuzhou Rockchip's long position.| Shenzhen Glory vs. Industrial and Commercial | Shenzhen Glory vs. Agricultural Bank of | Shenzhen Glory vs. China Construction Bank | Shenzhen Glory vs. Bank of China |
| Fuzhou Rockchip vs. Industrial and Commercial | Fuzhou Rockchip vs. Kweichow Moutai Co | Fuzhou Rockchip vs. Agricultural Bank of | Fuzhou Rockchip vs. China Mobile Limited |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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