Correlation Between Shenzhen Changfang and Shenzhen Hifuture
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By analyzing existing cross correlation between Shenzhen Changfang Light and Shenzhen Hifuture Electric, you can compare the effects of market volatilities on Shenzhen Changfang and Shenzhen Hifuture 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 Shenzhen Changfang with a short position of Shenzhen Hifuture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Changfang and Shenzhen Hifuture.
Diversification Opportunities for Shenzhen Changfang and Shenzhen Hifuture
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Shenzhen is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Changfang Light and Shenzhen Hifuture Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Hifuture and Shenzhen Changfang 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 Shenzhen Changfang Light are associated (or correlated) with Shenzhen Hifuture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Hifuture has no effect on the direction of Shenzhen Changfang i.e., Shenzhen Changfang and Shenzhen Hifuture go up and down completely randomly.
Pair Corralation between Shenzhen Changfang and Shenzhen Hifuture
Assuming the 90 days trading horizon Shenzhen Changfang Light is expected to generate 0.99 times more return on investment than Shenzhen Hifuture. However, Shenzhen Changfang Light is 1.01 times less risky than Shenzhen Hifuture. It trades about 0.04 of its potential returns per unit of risk. Shenzhen Hifuture Electric is currently generating about -0.02 per unit of risk. If you would invest 162.00 in Shenzhen Changfang Light on September 14, 2024 and sell it today you would earn a total of 31.00 from holding Shenzhen Changfang Light or generate 19.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.16% |
| Values | Daily Returns |
Shenzhen Changfang Light vs. Shenzhen Hifuture Electric
Performance |
| Timeline |
| Shenzhen Changfang Light |
| Shenzhen Hifuture |
Shenzhen Changfang and Shenzhen Hifuture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Changfang and Shenzhen Hifuture
The main advantage of trading using opposite Shenzhen Changfang and Shenzhen Hifuture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Changfang position performs unexpectedly, Shenzhen Hifuture 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 Hifuture will offset losses from the drop in Shenzhen Hifuture's long position.| Shenzhen Changfang vs. Industrial and Commercial | Shenzhen Changfang vs. Agricultural Bank of | Shenzhen Changfang vs. China Construction Bank | Shenzhen Changfang vs. Bank of China |
| Shenzhen Hifuture vs. Agricultural Bank of | Shenzhen Hifuture vs. Industrial and Commercial | Shenzhen Hifuture vs. Bank of China | Shenzhen Hifuture vs. PetroChina Co Ltd |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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