Correlation Between Wuhan Yangtze and Shenzhen
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By analyzing existing cross correlation between Wuhan Yangtze Communication and Shenzhen AV Display Co, you can compare the effects of market volatilities on Wuhan Yangtze and Shenzhen 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 Wuhan Yangtze with a short position of Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and Shenzhen.
Diversification Opportunities for Wuhan Yangtze and Shenzhen
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wuhan and Shenzhen is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and Shenzhen AV Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen AV Display and Wuhan Yangtze 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 Wuhan Yangtze Communication are associated (or correlated) with Shenzhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen AV Display has no effect on the direction of Wuhan Yangtze i.e., Wuhan Yangtze and Shenzhen go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and Shenzhen
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to generate 0.94 times more return on investment than Shenzhen. However, Wuhan Yangtze Communication is 1.07 times less risky than Shenzhen. It trades about 0.05 of its potential returns per unit of risk. Shenzhen AV Display Co is currently generating about 0.03 per unit of risk. If you would invest 1,681 in Wuhan Yangtze Communication on September 5, 2024 and sell it today you would earn a total of 1,161 from holding Wuhan Yangtze Communication or generate 69.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Yangtze Communication vs. Shenzhen AV Display Co
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| Shenzhen AV Display |
Wuhan Yangtze and Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and Shenzhen
The main advantage of trading using opposite Wuhan Yangtze and Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze position performs unexpectedly, Shenzhen 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 will offset losses from the drop in Shenzhen's long position.| Wuhan Yangtze vs. Industrial and Commercial | Wuhan Yangtze vs. China Construction Bank | Wuhan Yangtze vs. Bank of China | Wuhan Yangtze vs. Agricultural Bank of |
| Shenzhen vs. Elite Color Environmental | Shenzhen vs. Tianjin Capital Environmental | Shenzhen vs. Wuhan Yangtze Communication | Shenzhen vs. Anhui Fuhuang Steel |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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