Correlation Between Chongqing Shunbo and Shenzhen Kexin
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By analyzing existing cross correlation between Chongqing Shunbo Aluminum and Shenzhen Kexin Communication, you can compare the effects of market volatilities on Chongqing Shunbo 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 Chongqing Shunbo with a short position of Shenzhen Kexin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Shunbo and Shenzhen Kexin.
Diversification Opportunities for Chongqing Shunbo and Shenzhen Kexin
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chongqing and Shenzhen is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Shunbo Aluminum 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 Chongqing Shunbo 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 Chongqing Shunbo Aluminum 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 Chongqing Shunbo i.e., Chongqing Shunbo and Shenzhen Kexin go up and down completely randomly.
Pair Corralation between Chongqing Shunbo and Shenzhen Kexin
Assuming the 90 days trading horizon Chongqing Shunbo Aluminum is expected to under-perform the Shenzhen Kexin. But the stock apears to be less risky and, when comparing its historical volatility, Chongqing Shunbo Aluminum is 1.53 times less risky than Shenzhen Kexin. The stock trades about -0.03 of its potential returns per unit of risk. The Shenzhen Kexin Communication is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,196 in Shenzhen Kexin Communication on November 19, 2024 and sell it today you would lose (960.00) from holding Shenzhen Kexin Communication or give up 43.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Shunbo Aluminum vs. Shenzhen Kexin Communication
Performance |
| Timeline |
| Chongqing Shunbo Aluminum |
| Shenzhen Kexin Commu |
Chongqing Shunbo and Shenzhen Kexin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Shunbo and Shenzhen Kexin
The main advantage of trading using opposite Chongqing Shunbo and Shenzhen Kexin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Shunbo 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.| Chongqing Shunbo vs. Hubeiyichang Transportation Group | Chongqing Shunbo vs. Guangzhou Seagull Kitchen | Chongqing Shunbo vs. Longjian Road Bridge | Chongqing Shunbo vs. Shaanxi Broadcast TV |
| Shenzhen Kexin vs. Tianjin Silvery Dragon | Shenzhen Kexin vs. Hainan Mining Co | Shenzhen Kexin vs. Chengdu Xingrong Investment | Shenzhen Kexin vs. Henan Shuanghui 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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