Correlation Between Hubeiyichang Transportation and Shenzhen Coship
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By analyzing existing cross correlation between Hubeiyichang Transportation Group and Shenzhen Coship Electronics, you can compare the effects of market volatilities on Hubeiyichang Transportation and Shenzhen Coship 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 Hubeiyichang Transportation with a short position of Shenzhen Coship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubeiyichang Transportation and Shenzhen Coship.
Diversification Opportunities for Hubeiyichang Transportation and Shenzhen Coship
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hubeiyichang and Shenzhen is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hubeiyichang Transportation Gr and Shenzhen Coship Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Coship Elec and Hubeiyichang Transportation 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 Hubeiyichang Transportation Group are associated (or correlated) with Shenzhen Coship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Coship Elec has no effect on the direction of Hubeiyichang Transportation i.e., Hubeiyichang Transportation and Shenzhen Coship go up and down completely randomly.
Pair Corralation between Hubeiyichang Transportation and Shenzhen Coship
Assuming the 90 days trading horizon Hubeiyichang Transportation is expected to generate 14.23 times less return on investment than Shenzhen Coship. But when comparing it to its historical volatility, Hubeiyichang Transportation Group is 2.12 times less risky than Shenzhen Coship. It trades about 0.04 of its potential returns per unit of risk. Shenzhen Coship Electronics is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 162.00 in Shenzhen Coship Electronics on November 7, 2024 and sell it today you would earn a total of 417.00 from holding Shenzhen Coship Electronics or generate 257.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubeiyichang Transportation Gr vs. Shenzhen Coship Electronics
Performance |
| Timeline |
| Hubeiyichang Transportation |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shenzhen Coship Elec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Hubeiyichang Transportation and Shenzhen Coship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubeiyichang Transportation and Shenzhen Coship
The main advantage of trading using opposite Hubeiyichang Transportation and Shenzhen Coship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubeiyichang Transportation position performs unexpectedly, Shenzhen Coship 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 Coship will offset losses from the drop in Shenzhen Coship's long position.The idea behind Hubeiyichang Transportation Group and Shenzhen Coship Electronics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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