Correlation Between Fujian Longzhou and Shenzhen Fortune
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Shenzhen Fortune Trend, you can compare the effects of market volatilities on Fujian Longzhou and Shenzhen Fortune 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 Fortune. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Shenzhen Fortune.
Diversification Opportunities for Fujian Longzhou and Shenzhen Fortune
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fujian and Shenzhen is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Shenzhen Fortune Trend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Fortune Trend 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 Fortune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Fortune Trend has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Shenzhen Fortune go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Shenzhen Fortune
Assuming the 90 days trading horizon Fujian Longzhou is expected to generate 1.02 times less return on investment than Shenzhen Fortune. But when comparing it to its historical volatility, Fujian Longzhou Transportation is 1.42 times less risky than Shenzhen Fortune. It trades about 0.25 of its potential returns per unit of risk. Shenzhen Fortune Trend is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 15,211 in Shenzhen Fortune Trend on November 28, 2024 and sell it today you would earn a total of 1,177 from holding Shenzhen Fortune Trend or generate 7.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Longzhou Transportation vs. Shenzhen Fortune Trend
Performance |
| Timeline |
| Fujian Longzhou Tran |
| Shenzhen Fortune Trend |
Fujian Longzhou and Shenzhen Fortune Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Shenzhen Fortune
The main advantage of trading using opposite Fujian Longzhou and Shenzhen Fortune positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Shenzhen Fortune 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 Fortune will offset losses from the drop in Shenzhen Fortune's long position.| Fujian Longzhou vs. Hainan Airlines Co | Fujian Longzhou vs. Strait Innovation Internet | Fujian Longzhou vs. Fiberhome Telecommunication Technologies | Fujian Longzhou vs. Shanghai Shibei Hi Tech |
| Shenzhen Fortune vs. Inspur Software Co | Shenzhen Fortune vs. Qijing Machinery | Shenzhen Fortune vs. GuoChuang Software Co | Shenzhen Fortune vs. Linkage Software Co |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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