Correlation Between Shenzhen Kexin and Changchun Faway
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By analyzing existing cross correlation between Shenzhen Kexin Communication and Changchun Faway Automobile, you can compare the effects of market volatilities on Shenzhen Kexin and Changchun Faway 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 Changchun Faway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Kexin and Changchun Faway.
Diversification Opportunities for Shenzhen Kexin and Changchun Faway
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Changchun is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Kexin Communication and Changchun Faway Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun Faway Auto 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 Changchun Faway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun Faway Auto has no effect on the direction of Shenzhen Kexin i.e., Shenzhen Kexin and Changchun Faway go up and down completely randomly.
Pair Corralation between Shenzhen Kexin and Changchun Faway
Assuming the 90 days trading horizon Shenzhen Kexin Communication is expected to under-perform the Changchun Faway. In addition to that, Shenzhen Kexin is 1.28 times more volatile than Changchun Faway Automobile. It trades about -0.2 of its total potential returns per unit of risk. Changchun Faway Automobile is currently generating about 0.17 per unit of volatility. If you would invest 890.00 in Changchun Faway Automobile on August 25, 2024 and sell it today you would earn a total of 85.00 from holding Changchun Faway Automobile or generate 9.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Kexin Communication vs. Changchun Faway Automobile
Performance |
| Timeline |
| Shenzhen Kexin Commu |
| Changchun Faway Auto |
Shenzhen Kexin and Changchun Faway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Kexin and Changchun Faway
The main advantage of trading using opposite Shenzhen Kexin and Changchun Faway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Kexin position performs unexpectedly, Changchun Faway 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 Changchun Faway will offset losses from the drop in Changchun Faway's long position.| Shenzhen Kexin vs. Ming Yang Smart | Shenzhen Kexin vs. 159005 | Shenzhen Kexin vs. Loctek Ergonomic Technology | Shenzhen Kexin vs. Xiamen East Asia |
| Changchun Faway vs. Shenzhen Zhongzhuang Construction | Changchun Faway vs. Kuangda Technology Group | Changchun Faway vs. Glodon Software Co | Changchun Faway vs. Hubei Forbon Technology |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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