Correlation Between Shenzhen Kexin and Wuhan Xianglong
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By analyzing existing cross correlation between Shenzhen Kexin Communication and Wuhan Xianglong Power, you can compare the effects of market volatilities on Shenzhen Kexin and Wuhan Xianglong 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 Xianglong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Kexin and Wuhan Xianglong.
Diversification Opportunities for Shenzhen Kexin and Wuhan Xianglong
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Wuhan is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Kexin Communication and Wuhan Xianglong Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan Xianglong Power 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 Xianglong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan Xianglong Power has no effect on the direction of Shenzhen Kexin i.e., Shenzhen Kexin and Wuhan Xianglong go up and down completely randomly.
Pair Corralation between Shenzhen Kexin and Wuhan Xianglong
Assuming the 90 days trading horizon Shenzhen Kexin Communication is expected to under-perform the Wuhan Xianglong. But the stock apears to be less risky and, when comparing its historical volatility, Shenzhen Kexin Communication is 1.8 times less risky than Wuhan Xianglong. The stock trades about -0.24 of its potential returns per unit of risk. The Wuhan Xianglong Power is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,149 in Wuhan Xianglong Power on August 31, 2024 and sell it today you would earn a total of 50.00 from holding Wuhan Xianglong Power or generate 4.35% 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. Wuhan Xianglong Power
Performance |
| Timeline |
| Shenzhen Kexin Commu |
| Wuhan Xianglong Power |
Shenzhen Kexin and Wuhan Xianglong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Kexin and Wuhan Xianglong
The main advantage of trading using opposite Shenzhen Kexin and Wuhan Xianglong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Kexin position performs unexpectedly, Wuhan Xianglong 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 Xianglong will offset losses from the drop in Wuhan Xianglong's long position.| Shenzhen Kexin vs. Kweichow Moutai Co | Shenzhen Kexin vs. NAURA Technology Group | Shenzhen Kexin vs. APT Medical | Shenzhen Kexin vs. Contemporary Amperex Technology |
| Wuhan Xianglong vs. Beijing Bewinner Communications | Wuhan Xianglong vs. Shenzhen Kexin Communication | Wuhan Xianglong vs. Bomin Electronics Co | Wuhan Xianglong vs. Hangzhou Prevail Optoelectronic |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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