Correlation Between Caihong Display and Shenzhen
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By analyzing existing cross correlation between Caihong Display Devices and Shenzhen AV Display Co, you can compare the effects of market volatilities on Caihong Display 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 Caihong Display with a short position of Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and Shenzhen.
Diversification Opportunities for Caihong Display and Shenzhen
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Caihong and Shenzhen is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices 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 Caihong Display 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 Caihong Display Devices 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 Caihong Display i.e., Caihong Display and Shenzhen go up and down completely randomly.
Pair Corralation between Caihong Display and Shenzhen
Assuming the 90 days trading horizon Caihong Display Devices is expected to under-perform the Shenzhen. But the stock apears to be less risky and, when comparing its historical volatility, Caihong Display Devices is 1.5 times less risky than Shenzhen. The stock trades about -0.08 of its potential returns per unit of risk. The Shenzhen AV Display Co is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3,040 in Shenzhen AV Display Co on September 3, 2024 and sell it today you would earn a total of 387.00 from holding Shenzhen AV Display Co or generate 12.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caihong Display Devices vs. Shenzhen AV Display Co
Performance |
| Timeline |
| Caihong Display Devices |
| Shenzhen AV Display |
Caihong Display and Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caihong Display and Shenzhen
The main advantage of trading using opposite Caihong Display and Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display 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.| Caihong Display vs. Agricultural Bank of | Caihong Display vs. China Construction Bank | Caihong Display vs. Postal Savings Bank | Caihong Display vs. Bank of Communications |
| Shenzhen vs. Beijing SPC Environment | Shenzhen vs. Sinocat Environmental Technology | Shenzhen vs. Pengxin International Mining | Shenzhen vs. Minmetals Capital Co |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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