Correlation Between Changchun Faway and Shenzhen Kexin
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By analyzing existing cross correlation between Changchun Faway Automobile and Shenzhen Kexin Communication, you can compare the effects of market volatilities on Changchun Faway and Shenzhen Kexin 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 Changchun Faway with a short position of Shenzhen Kexin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and Shenzhen Kexin.
Diversification Opportunities for Changchun Faway and Shenzhen Kexin
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changchun and Shenzhen is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile and Shenzhen Kexin Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Kexin Commu and Changchun Faway 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 Changchun Faway Automobile are associated (or correlated) with Shenzhen Kexin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Kexin Commu has no effect on the direction of Changchun Faway i.e., Changchun Faway and Shenzhen Kexin go up and down completely randomly.
Pair Corralation between Changchun Faway and Shenzhen Kexin
Assuming the 90 days trading horizon Changchun Faway Automobile is expected to generate 0.75 times more return on investment than Shenzhen Kexin. However, Changchun Faway Automobile is 1.33 times less risky than Shenzhen Kexin. It trades about -0.01 of its potential returns per unit of risk. Shenzhen Kexin Communication is currently generating about -0.17 per unit of risk. If you would invest 951.00 in Changchun Faway Automobile on August 28, 2024 and sell it today you would lose (11.00) from holding Changchun Faway Automobile or give up 1.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun Faway Automobile vs. Shenzhen Kexin Communication
Performance |
| Timeline |
| Changchun Faway Auto |
| Shenzhen Kexin Commu |
Changchun Faway and Shenzhen Kexin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Faway and Shenzhen Kexin
The main advantage of trading using opposite Changchun Faway and Shenzhen Kexin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway position performs unexpectedly, Shenzhen Kexin 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 Kexin will offset losses from the drop in Shenzhen Kexin's long position.| Changchun Faway vs. Miracll Chemicals Co | Changchun Faway vs. Guangzhou KingTeller Technology | Changchun Faway vs. Nantong Jiangshan Agrochemical | Changchun Faway vs. Shanghai Jinfeng Wine |
| Shenzhen Kexin vs. Shenzhen MYS Environmental | Shenzhen Kexin vs. AVIC Fund Management | Shenzhen Kexin vs. Shenzhen Bingchuan Network | Shenzhen Kexin vs. Penghua Shenzhen Energy |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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