Correlation Between Shenzhen Hans and Changshu Ruite
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By analyzing existing cross correlation between Shenzhen Hans CNC and Changshu Ruite Electric, you can compare the effects of market volatilities on Shenzhen Hans and Changshu Ruite 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 Hans with a short position of Changshu Ruite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Hans and Changshu Ruite.
Diversification Opportunities for Shenzhen Hans and Changshu Ruite
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shenzhen and Changshu is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Hans CNC and Changshu Ruite Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changshu Ruite Electric and Shenzhen Hans 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 Hans CNC are associated (or correlated) with Changshu Ruite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changshu Ruite Electric has no effect on the direction of Shenzhen Hans i.e., Shenzhen Hans and Changshu Ruite go up and down completely randomly.
Pair Corralation between Shenzhen Hans and Changshu Ruite
Assuming the 90 days trading horizon Shenzhen Hans CNC is expected to generate 1.28 times more return on investment than Changshu Ruite. However, Shenzhen Hans is 1.28 times more volatile than Changshu Ruite Electric. It trades about 0.06 of its potential returns per unit of risk. Changshu Ruite Electric is currently generating about -0.22 per unit of risk. If you would invest 3,708 in Shenzhen Hans CNC on October 31, 2024 and sell it today you would earn a total of 98.00 from holding Shenzhen Hans CNC or generate 2.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Hans CNC vs. Changshu Ruite Electric
Performance |
| Timeline |
| Shenzhen Hans CNC |
| Changshu Ruite Electric |
Shenzhen Hans and Changshu Ruite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Hans and Changshu Ruite
The main advantage of trading using opposite Shenzhen Hans and Changshu Ruite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Hans position performs unexpectedly, Changshu Ruite 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 Changshu Ruite will offset losses from the drop in Changshu Ruite's long position.| Shenzhen Hans vs. China Asset Management | Shenzhen Hans vs. Zhongshan Broad Ocean Motor | Shenzhen Hans vs. Harson Trading China | Shenzhen Hans vs. Zhengping RoadBridge Constr |
| Changshu Ruite vs. Luyin Investment Group | Changshu Ruite vs. Chengdu Xingrong Investment | Changshu Ruite vs. Zhejiang Construction Investment | Changshu Ruite vs. Jointo Energy 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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