Correlation Between Shenzhen Urban and Fujian Wanchen
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By analyzing existing cross correlation between Shenzhen Urban Transport and Fujian Wanchen Biotechnology, you can compare the effects of market volatilities on Shenzhen Urban and Fujian Wanchen 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 Urban with a short position of Fujian Wanchen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Urban and Fujian Wanchen.
Diversification Opportunities for Shenzhen Urban and Fujian Wanchen
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shenzhen and Fujian is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Urban Transport and Fujian Wanchen Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Wanchen Biote and Shenzhen Urban 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 Urban Transport are associated (or correlated) with Fujian Wanchen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Wanchen Biote has no effect on the direction of Shenzhen Urban i.e., Shenzhen Urban and Fujian Wanchen go up and down completely randomly.
Pair Corralation between Shenzhen Urban and Fujian Wanchen
Assuming the 90 days trading horizon Shenzhen Urban Transport is expected to under-perform the Fujian Wanchen. But the stock apears to be less risky and, when comparing its historical volatility, Shenzhen Urban Transport is 1.01 times less risky than Fujian Wanchen. The stock trades about -0.21 of its potential returns per unit of risk. The Fujian Wanchen Biotechnology is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 7,678 in Fujian Wanchen Biotechnology on October 28, 2024 and sell it today you would earn a total of 2,401 from holding Fujian Wanchen Biotechnology or generate 31.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Urban Transport vs. Fujian Wanchen Biotechnology
Performance |
| Timeline |
| Shenzhen Urban Transport |
| Fujian Wanchen Biote |
Shenzhen Urban and Fujian Wanchen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Urban and Fujian Wanchen
The main advantage of trading using opposite Shenzhen Urban and Fujian Wanchen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Urban position performs unexpectedly, Fujian Wanchen 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 Fujian Wanchen will offset losses from the drop in Fujian Wanchen's long position.| Shenzhen Urban vs. Bank of China | Shenzhen Urban vs. Kweichow Moutai Co | Shenzhen Urban vs. PetroChina Co Ltd | Shenzhen Urban vs. Bank of Communications |
| Fujian Wanchen vs. Industrial and Commercial | Fujian Wanchen vs. Kweichow Moutai Co | Fujian Wanchen vs. Agricultural Bank of | Fujian Wanchen 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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