Correlation Between Fujian Longzhou and Shenzhen Kexin
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Shenzhen Kexin Communication, you can compare the effects of market volatilities on Fujian Longzhou and Shenzhen Kexin 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 Longzhou with a short position of Shenzhen Kexin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Shenzhen Kexin.
Diversification Opportunities for Fujian Longzhou and Shenzhen Kexin
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fujian and Shenzhen is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Shenzhen Kexin Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Kexin Commu and Fujian Longzhou 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 Longzhou Transportation are associated (or correlated) with Shenzhen Kexin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Kexin Commu has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Shenzhen Kexin go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Shenzhen Kexin
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to generate 1.16 times more return on investment than Shenzhen Kexin. However, Fujian Longzhou is 1.16 times more volatile than Shenzhen Kexin Communication. It trades about 0.13 of its potential returns per unit of risk. Shenzhen Kexin Communication is currently generating about -0.2 per unit of risk. If you would invest 414.00 in Fujian Longzhou Transportation on August 25, 2024 and sell it today you would earn a total of 41.00 from holding Fujian Longzhou Transportation or generate 9.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Longzhou Transportation vs. Shenzhen Kexin Communication
Performance |
| Timeline |
| Fujian Longzhou Tran |
| Shenzhen Kexin Commu |
Fujian Longzhou and Shenzhen Kexin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Shenzhen Kexin
The main advantage of trading using opposite Fujian Longzhou and Shenzhen Kexin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Shenzhen Kexin 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 Kexin will offset losses from the drop in Shenzhen Kexin's long position.| Fujian Longzhou vs. Agricultural Bank of | Fujian Longzhou vs. Industrial and Commercial | Fujian Longzhou vs. Bank of China | Fujian Longzhou vs. China Construction Bank |
| Shenzhen Kexin vs. Shenzhen MYS Environmental | Shenzhen Kexin vs. AVIC Fund Management | Shenzhen Kexin vs. Shenzhen Bingchuan Network | Shenzhen Kexin vs. Penghua Shenzhen Energy |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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