Correlation Between Shenzhen Kexin and Shanghai Yanpu
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By analyzing existing cross correlation between Shenzhen Kexin Communication and Shanghai Yanpu Metal, you can compare the effects of market volatilities on Shenzhen Kexin and Shanghai Yanpu 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 Shanghai Yanpu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Kexin and Shanghai Yanpu.
Diversification Opportunities for Shenzhen Kexin and Shanghai Yanpu
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shenzhen and Shanghai is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Kexin Communication and Shanghai Yanpu Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Yanpu Metal 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 Shanghai Yanpu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Yanpu Metal has no effect on the direction of Shenzhen Kexin i.e., Shenzhen Kexin and Shanghai Yanpu go up and down completely randomly.
Pair Corralation between Shenzhen Kexin and Shanghai Yanpu
Assuming the 90 days trading horizon Shenzhen Kexin Communication is expected to under-perform the Shanghai Yanpu. In addition to that, Shenzhen Kexin is 1.32 times more volatile than Shanghai Yanpu Metal. It trades about -0.2 of its total potential returns per unit of risk. Shanghai Yanpu Metal is currently generating about -0.02 per unit of volatility. If you would invest 3,406 in Shanghai Yanpu Metal on August 25, 2024 and sell it today you would lose (51.00) from holding Shanghai Yanpu Metal or give up 1.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Kexin Communication vs. Shanghai Yanpu Metal
Performance |
| Timeline |
| Shenzhen Kexin Commu |
| Shanghai Yanpu Metal |
Shenzhen Kexin and Shanghai Yanpu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Kexin and Shanghai Yanpu
The main advantage of trading using opposite Shenzhen Kexin and Shanghai Yanpu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Kexin position performs unexpectedly, Shanghai Yanpu 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 Shanghai Yanpu will offset losses from the drop in Shanghai Yanpu'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 |
| Shanghai Yanpu vs. Kweichow Moutai Co | Shanghai Yanpu vs. Contemporary Amperex Technology | Shanghai Yanpu vs. G bits Network Technology | Shanghai Yanpu vs. Beijing Roborock 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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