Correlation Between Shenzhen Changfang and Metro Investment
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By analyzing existing cross correlation between Shenzhen Changfang Light and Metro Investment Development, you can compare the effects of market volatilities on Shenzhen Changfang and Metro Investment 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 Metro Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Changfang and Metro Investment.
Diversification Opportunities for Shenzhen Changfang and Metro Investment
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Metro is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Changfang Light and Metro Investment Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Investment Dev 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 Metro Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Investment Dev has no effect on the direction of Shenzhen Changfang i.e., Shenzhen Changfang and Metro Investment go up and down completely randomly.
Pair Corralation between Shenzhen Changfang and Metro Investment
Assuming the 90 days trading horizon Shenzhen Changfang is expected to generate 1.14 times less return on investment than Metro Investment. But when comparing it to its historical volatility, Shenzhen Changfang Light is 1.01 times less risky than Metro Investment. It trades about 0.01 of its potential returns per unit of risk. Metro Investment Development is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 503.00 in Metro Investment Development on September 5, 2024 and sell it today you would lose (31.00) from holding Metro Investment Development or give up 6.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Changfang Light vs. Metro Investment Development
Performance |
| Timeline |
| Shenzhen Changfang Light |
| Metro Investment Dev |
Shenzhen Changfang and Metro Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Changfang and Metro Investment
The main advantage of trading using opposite Shenzhen Changfang and Metro Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Changfang position performs unexpectedly, Metro Investment 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 Metro Investment will offset losses from the drop in Metro Investment's long position.| Shenzhen Changfang vs. Biwin Storage Technology | Shenzhen Changfang vs. PetroChina Co Ltd | Shenzhen Changfang vs. Industrial and Commercial | Shenzhen Changfang vs. China Construction Bank |
| Metro Investment vs. Nanjing Putian Telecommunications | Metro Investment vs. Tianjin Realty Development | Metro Investment vs. Shenyang Huitian Thermal | Metro Investment vs. Shenzhen Changfang Light |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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