Correlation Between Fujian Oriental and Shenzhen SDG
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By analyzing existing cross correlation between Fujian Oriental Silver and Shenzhen SDG Information, you can compare the effects of market volatilities on Fujian Oriental and Shenzhen SDG 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 Oriental with a short position of Shenzhen SDG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Oriental and Shenzhen SDG.
Diversification Opportunities for Fujian Oriental and Shenzhen SDG
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fujian and Shenzhen is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Oriental Silver and Shenzhen SDG Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen SDG Information and Fujian Oriental 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 Oriental Silver are associated (or correlated) with Shenzhen SDG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen SDG Information has no effect on the direction of Fujian Oriental i.e., Fujian Oriental and Shenzhen SDG go up and down completely randomly.
Pair Corralation between Fujian Oriental and Shenzhen SDG
Assuming the 90 days trading horizon Fujian Oriental Silver is expected to generate 1.26 times more return on investment than Shenzhen SDG. However, Fujian Oriental is 1.26 times more volatile than Shenzhen SDG Information. It trades about 0.02 of its potential returns per unit of risk. Shenzhen SDG Information is currently generating about -0.01 per unit of risk. If you would invest 570.00 in Fujian Oriental Silver on November 8, 2024 and sell it today you would lose (16.00) from holding Fujian Oriental Silver or give up 2.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Oriental Silver vs. Shenzhen SDG Information
Performance |
| Timeline |
| Fujian Oriental Silver |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shenzhen SDG Information |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fujian Oriental and Shenzhen SDG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Oriental and Shenzhen SDG
The main advantage of trading using opposite Fujian Oriental and Shenzhen SDG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Oriental position performs unexpectedly, Shenzhen SDG 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 SDG will offset losses from the drop in Shenzhen SDG's long position.The idea behind Fujian Oriental Silver and Shenzhen SDG Information 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.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 Global Correlations module to find global opportunities by holding instruments from different markets.
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