Correlation Between Shenzhen Changfang and Jiangsu Zhongtian
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By analyzing existing cross correlation between Shenzhen Changfang Light and Jiangsu Zhongtian Technology, you can compare the effects of market volatilities on Shenzhen Changfang and Jiangsu Zhongtian 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 Jiangsu Zhongtian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Changfang and Jiangsu Zhongtian.
Diversification Opportunities for Shenzhen Changfang and Jiangsu Zhongtian
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Jiangsu is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Changfang Light and Jiangsu Zhongtian Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Zhongtian 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 Jiangsu Zhongtian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Zhongtian has no effect on the direction of Shenzhen Changfang i.e., Shenzhen Changfang and Jiangsu Zhongtian go up and down completely randomly.
Pair Corralation between Shenzhen Changfang and Jiangsu Zhongtian
Assuming the 90 days trading horizon Shenzhen Changfang Light is expected to generate 2.12 times more return on investment than Jiangsu Zhongtian. However, Shenzhen Changfang is 2.12 times more volatile than Jiangsu Zhongtian Technology. It trades about 0.06 of its potential returns per unit of risk. Jiangsu Zhongtian Technology is currently generating about -0.09 per unit of risk. If you would invest 164.00 in Shenzhen Changfang Light on September 25, 2024 and sell it today you would earn a total of 6.00 from holding Shenzhen Changfang Light or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Changfang Light vs. Jiangsu Zhongtian Technology
Performance |
| Timeline |
| Shenzhen Changfang Light |
| Jiangsu Zhongtian |
Shenzhen Changfang and Jiangsu Zhongtian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Changfang and Jiangsu Zhongtian
The main advantage of trading using opposite Shenzhen Changfang and Jiangsu Zhongtian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Changfang position performs unexpectedly, Jiangsu Zhongtian 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 Jiangsu Zhongtian will offset losses from the drop in Jiangsu Zhongtian's long position.| Shenzhen Changfang vs. Kweichow Moutai Co | Shenzhen Changfang vs. Contemporary Amperex Technology | Shenzhen Changfang vs. G bits Network Technology | Shenzhen Changfang vs. BYD Co Ltd |
| Jiangsu Zhongtian vs. Kweichow Moutai Co | Jiangsu Zhongtian vs. Contemporary Amperex Technology | Jiangsu Zhongtian vs. G bits Network Technology | Jiangsu Zhongtian vs. BYD 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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