Correlation Between Elite Color and Shenzhen Changfang
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By analyzing existing cross correlation between Elite Color Environmental and Shenzhen Changfang Light, you can compare the effects of market volatilities on Elite Color and Shenzhen Changfang 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 Elite Color with a short position of Shenzhen Changfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elite Color and Shenzhen Changfang.
Diversification Opportunities for Elite Color and Shenzhen Changfang
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elite and Shenzhen is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Elite Color Environmental and Shenzhen Changfang Light in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Changfang Light and Elite Color 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 Elite Color Environmental are associated (or correlated) with Shenzhen Changfang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Changfang Light has no effect on the direction of Elite Color i.e., Elite Color and Shenzhen Changfang go up and down completely randomly.
Pair Corralation between Elite Color and Shenzhen Changfang
Assuming the 90 days trading horizon Elite Color Environmental is expected to under-perform the Shenzhen Changfang. But the stock apears to be less risky and, when comparing its historical volatility, Elite Color Environmental is 1.37 times less risky than Shenzhen Changfang. The stock trades about -0.21 of its potential returns per unit of risk. The Shenzhen Changfang Light is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 194.00 in Shenzhen Changfang Light on October 12, 2024 and sell it today you would lose (7.00) from holding Shenzhen Changfang Light or give up 3.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elite Color Environmental vs. Shenzhen Changfang Light
Performance |
| Timeline |
| Elite Color Environmental |
| Shenzhen Changfang Light |
Elite Color and Shenzhen Changfang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elite Color and Shenzhen Changfang
The main advantage of trading using opposite Elite Color and Shenzhen Changfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elite Color position performs unexpectedly, Shenzhen Changfang 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 Changfang will offset losses from the drop in Shenzhen Changfang's long position.| Elite Color vs. China Aluminum International | Elite Color vs. Jiaozuo Wanfang Aluminum | Elite Color vs. Kangxin New Materials | Elite Color vs. Western Metal Materials |
| Shenzhen Changfang vs. XiaMen HongXin Electron tech | Shenzhen Changfang vs. Elite Color Environmental | Shenzhen Changfang vs. Fujian Nanwang Environment | Shenzhen Changfang vs. Eyebright Medical Technology |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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