Correlation Between Shenzhen Urban and Quectel Wireless
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By analyzing existing cross correlation between Shenzhen Urban Transport and Quectel Wireless Solutions, you can compare the effects of market volatilities on Shenzhen Urban and Quectel Wireless 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 Quectel Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Urban and Quectel Wireless.
Diversification Opportunities for Shenzhen Urban and Quectel Wireless
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shenzhen and Quectel is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Urban Transport and Quectel Wireless Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quectel Wireless Sol 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 Quectel Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quectel Wireless Sol has no effect on the direction of Shenzhen Urban i.e., Shenzhen Urban and Quectel Wireless go up and down completely randomly.
Pair Corralation between Shenzhen Urban and Quectel Wireless
Assuming the 90 days trading horizon Shenzhen Urban Transport is expected to generate 1.27 times more return on investment than Quectel Wireless. However, Shenzhen Urban is 1.27 times more volatile than Quectel Wireless Solutions. It trades about 0.07 of its potential returns per unit of risk. Quectel Wireless Solutions is currently generating about 0.02 per unit of risk. If you would invest 1,257 in Shenzhen Urban Transport on November 7, 2024 and sell it today you would earn a total of 2,901 from holding Shenzhen Urban Transport or generate 230.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Urban Transport vs. Quectel Wireless Solutions
Performance |
| Timeline |
| Shenzhen Urban Transport |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Quectel Wireless Sol |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Shenzhen Urban and Quectel Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Urban and Quectel Wireless
The main advantage of trading using opposite Shenzhen Urban and Quectel Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Urban position performs unexpectedly, Quectel Wireless 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 Quectel Wireless will offset losses from the drop in Quectel Wireless' long position.The idea behind Shenzhen Urban Transport and Quectel Wireless Solutions pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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