Correlation Between Weihai Honglin and Shenzhen Clou
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By analyzing existing cross correlation between Weihai Honglin Electronic and Shenzhen Clou Electronics, you can compare the effects of market volatilities on Weihai Honglin and Shenzhen Clou 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 Weihai Honglin with a short position of Shenzhen Clou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weihai Honglin and Shenzhen Clou.
Diversification Opportunities for Weihai Honglin and Shenzhen Clou
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Weihai and Shenzhen is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Weihai Honglin Electronic and Shenzhen Clou Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Clou Electronics and Weihai Honglin 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 Weihai Honglin Electronic are associated (or correlated) with Shenzhen Clou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Clou Electronics has no effect on the direction of Weihai Honglin i.e., Weihai Honglin and Shenzhen Clou go up and down completely randomly.
Pair Corralation between Weihai Honglin and Shenzhen Clou
Assuming the 90 days trading horizon Weihai Honglin Electronic is expected to generate 1.19 times more return on investment than Shenzhen Clou. However, Weihai Honglin is 1.19 times more volatile than Shenzhen Clou Electronics. It trades about 0.03 of its potential returns per unit of risk. Shenzhen Clou Electronics is currently generating about 0.02 per unit of risk. If you would invest 1,220 in Weihai Honglin Electronic on August 25, 2024 and sell it today you would earn a total of 119.00 from holding Weihai Honglin Electronic or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weihai Honglin Electronic vs. Shenzhen Clou Electronics
Performance |
| Timeline |
| Weihai Honglin Electronic |
| Shenzhen Clou Electronics |
Weihai Honglin and Shenzhen Clou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weihai Honglin and Shenzhen Clou
The main advantage of trading using opposite Weihai Honglin and Shenzhen Clou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weihai Honglin position performs unexpectedly, Shenzhen Clou 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 Clou will offset losses from the drop in Shenzhen Clou's long position.| Weihai Honglin vs. Kweichow Moutai Co | Weihai Honglin vs. Shenzhen Mindray Bio Medical | Weihai Honglin vs. Jiangsu Pacific Quartz | Weihai Honglin vs. G bits Network Technology |
| Shenzhen Clou vs. Sunwave Communications Co | Shenzhen Clou vs. Zhejiang Qianjiang Motorcycle | Shenzhen Clou vs. Chongqing Brewery Co | Shenzhen Clou vs. State Grid InformationCommunication |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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