Correlation Between Shenzhen Kexin and Wuhan Yangtze
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By analyzing existing cross correlation between Shenzhen Kexin Communication and Wuhan Yangtze Communication, you can compare the effects of market volatilities on Shenzhen Kexin and Wuhan Yangtze 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 Wuhan Yangtze. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Kexin and Wuhan Yangtze.
Diversification Opportunities for Shenzhen Kexin and Wuhan Yangtze
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shenzhen and Wuhan is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Kexin Communication and Wuhan Yangtze Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan Yangtze Commun 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 Wuhan Yangtze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan Yangtze Commun has no effect on the direction of Shenzhen Kexin i.e., Shenzhen Kexin and Wuhan Yangtze go up and down completely randomly.
Pair Corralation between Shenzhen Kexin and Wuhan Yangtze
Assuming the 90 days trading horizon Shenzhen Kexin Communication is expected to under-perform the Wuhan Yangtze. But the stock apears to be less risky and, when comparing its historical volatility, Shenzhen Kexin Communication is 2.07 times less risky than Wuhan Yangtze. The stock trades about -0.22 of its potential returns per unit of risk. The Wuhan Yangtze Communication is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,941 in Wuhan Yangtze Communication on September 1, 2024 and sell it today you would earn a total of 1,028 from holding Wuhan Yangtze Communication or generate 52.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Kexin Communication vs. Wuhan Yangtze Communication
Performance |
| Timeline |
| Shenzhen Kexin Commu |
| Wuhan Yangtze Commun |
Shenzhen Kexin and Wuhan Yangtze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Kexin and Wuhan Yangtze
The main advantage of trading using opposite Shenzhen Kexin and Wuhan Yangtze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Kexin position performs unexpectedly, Wuhan Yangtze 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 Wuhan Yangtze will offset losses from the drop in Wuhan Yangtze'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 |
| Wuhan Yangtze vs. Industrial and Commercial | Wuhan Yangtze vs. Kweichow Moutai Co | Wuhan Yangtze vs. Agricultural Bank of | Wuhan Yangtze vs. China Mobile Limited |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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