Correlation Between Shantou Wanshun and Xiamen Kehua
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By analyzing existing cross correlation between Shantou Wanshun Package and Xiamen Kehua Hengsheng, you can compare the effects of market volatilities on Shantou Wanshun and Xiamen Kehua 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 Shantou Wanshun with a short position of Xiamen Kehua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shantou Wanshun and Xiamen Kehua.
Diversification Opportunities for Shantou Wanshun and Xiamen Kehua
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shantou and Xiamen is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Shantou Wanshun Package and Xiamen Kehua Hengsheng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Kehua Hengsheng and Shantou Wanshun 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 Shantou Wanshun Package are associated (or correlated) with Xiamen Kehua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Kehua Hengsheng has no effect on the direction of Shantou Wanshun i.e., Shantou Wanshun and Xiamen Kehua go up and down completely randomly.
Pair Corralation between Shantou Wanshun and Xiamen Kehua
Assuming the 90 days trading horizon Shantou Wanshun Package is expected to under-perform the Xiamen Kehua. But the stock apears to be less risky and, when comparing its historical volatility, Shantou Wanshun Package is 2.1 times less risky than Xiamen Kehua. The stock trades about -0.05 of its potential returns per unit of risk. The Xiamen Kehua Hengsheng is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,985 in Xiamen Kehua Hengsheng on November 8, 2024 and sell it today you would lose (66.00) from holding Xiamen Kehua Hengsheng or give up 2.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shantou Wanshun Package vs. Xiamen Kehua Hengsheng
Performance |
| Timeline |
| Shantou Wanshun Package |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Xiamen Kehua Hengsheng |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Shantou Wanshun and Xiamen Kehua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shantou Wanshun and Xiamen Kehua
The main advantage of trading using opposite Shantou Wanshun and Xiamen Kehua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shantou Wanshun position performs unexpectedly, Xiamen Kehua 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 Xiamen Kehua will offset losses from the drop in Xiamen Kehua's long position.The idea behind Shantou Wanshun Package and Xiamen Kehua Hengsheng 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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