Correlation Between Fujian Nanwang and Shenzhen Inovance
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By analyzing existing cross correlation between Fujian Nanwang Environment and Shenzhen Inovance Tech, you can compare the effects of market volatilities on Fujian Nanwang and Shenzhen Inovance 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 Fujian Nanwang with a short position of Shenzhen Inovance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Nanwang and Shenzhen Inovance.
Diversification Opportunities for Fujian Nanwang and Shenzhen Inovance
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fujian and Shenzhen is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Nanwang Environment and Shenzhen Inovance Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Inovance Tech and Fujian Nanwang 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 Fujian Nanwang Environment are associated (or correlated) with Shenzhen Inovance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Inovance Tech has no effect on the direction of Fujian Nanwang i.e., Fujian Nanwang and Shenzhen Inovance go up and down completely randomly.
Pair Corralation between Fujian Nanwang and Shenzhen Inovance
Assuming the 90 days trading horizon Fujian Nanwang Environment is expected to under-perform the Shenzhen Inovance. In addition to that, Fujian Nanwang is 1.23 times more volatile than Shenzhen Inovance Tech. It trades about -0.26 of its total potential returns per unit of risk. Shenzhen Inovance Tech is currently generating about 0.19 per unit of volatility. If you would invest 5,576 in Shenzhen Inovance Tech on November 7, 2024 and sell it today you would earn a total of 443.00 from holding Shenzhen Inovance Tech or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Nanwang Environment vs. Shenzhen Inovance Tech
Performance |
| Timeline |
| Fujian Nanwang Envir |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shenzhen Inovance Tech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fujian Nanwang and Shenzhen Inovance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Nanwang and Shenzhen Inovance
The main advantage of trading using opposite Fujian Nanwang and Shenzhen Inovance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Nanwang position performs unexpectedly, Shenzhen Inovance 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 Shenzhen Inovance will offset losses from the drop in Shenzhen Inovance's long position.The idea behind Fujian Nanwang Environment and Shenzhen Inovance Tech 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.| Shenzhen Inovance vs. Shanghai SK Automation | Shenzhen Inovance vs. Chongqing Mas SciTech | Shenzhen Inovance vs. Zhejiang Jiecang Linear | Shenzhen Inovance vs. Zhejiang Kaishan Compressor |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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