Correlation Between Shenzhen Kexin and Shandong Zhongji
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By analyzing existing cross correlation between Shenzhen Kexin Communication and Shandong Zhongji Electrical, you can compare the effects of market volatilities on Shenzhen Kexin and Shandong Zhongji 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 Kexin with a short position of Shandong Zhongji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Kexin and Shandong Zhongji.
Diversification Opportunities for Shenzhen Kexin and Shandong Zhongji
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Shandong is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Kexin Communication and Shandong Zhongji Electrical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Zhongji Ele and Shenzhen Kexin 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 Kexin Communication are associated (or correlated) with Shandong Zhongji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Zhongji Ele has no effect on the direction of Shenzhen Kexin i.e., Shenzhen Kexin and Shandong Zhongji go up and down completely randomly.
Pair Corralation between Shenzhen Kexin and Shandong Zhongji
Assuming the 90 days trading horizon Shenzhen Kexin Communication is expected to under-perform the Shandong Zhongji. But the stock apears to be less risky and, when comparing its historical volatility, Shenzhen Kexin Communication is 1.07 times less risky than Shandong Zhongji. The stock trades about -0.25 of its potential returns per unit of risk. The Shandong Zhongji Electrical is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 14,073 in Shandong Zhongji Electrical on September 2, 2024 and sell it today you would lose (1,400) from holding Shandong Zhongji Electrical or give up 9.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Kexin Communication vs. Shandong Zhongji Electrical
Performance |
| Timeline |
| Shenzhen Kexin Commu |
| Shandong Zhongji Ele |
Shenzhen Kexin and Shandong Zhongji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Kexin and Shandong Zhongji
The main advantage of trading using opposite Shenzhen Kexin and Shandong Zhongji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Kexin position performs unexpectedly, Shandong Zhongji 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 Shandong Zhongji will offset losses from the drop in Shandong Zhongji's long position.| Shenzhen Kexin vs. Industrial and Commercial | Shenzhen Kexin vs. Kweichow Moutai Co | Shenzhen Kexin vs. Agricultural Bank of | Shenzhen Kexin vs. China Mobile Limited |
| Shandong Zhongji vs. Xinhua Winshare Publishing | Shandong Zhongji vs. Offcn Education Technology | Shandong Zhongji vs. Shenzhen Kexin Communication | Shandong Zhongji vs. Railway Signal Communication |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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