Correlation Between Xiamen Bank and Shenzhen Kexin
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By analyzing existing cross correlation between Xiamen Bank Co and Shenzhen Kexin Communication, you can compare the effects of market volatilities on Xiamen Bank 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 Xiamen Bank with a short position of Shenzhen Kexin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen Bank and Shenzhen Kexin.
Diversification Opportunities for Xiamen Bank and Shenzhen Kexin
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xiamen and Shenzhen is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen Bank Co 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 Xiamen Bank 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 Xiamen Bank Co 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 Xiamen Bank i.e., Xiamen Bank and Shenzhen Kexin go up and down completely randomly.
Pair Corralation between Xiamen Bank and Shenzhen Kexin
Assuming the 90 days trading horizon Xiamen Bank Co is expected to generate 0.54 times more return on investment than Shenzhen Kexin. However, Xiamen Bank Co is 1.85 times less risky than Shenzhen Kexin. It trades about 0.15 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 520.00 in Xiamen Bank Co on August 29, 2024 and sell it today you would earn a total of 30.00 from holding Xiamen Bank Co or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiamen Bank Co vs. Shenzhen Kexin Communication
Performance |
| Timeline |
| Xiamen Bank |
| Shenzhen Kexin Commu |
Xiamen Bank and Shenzhen Kexin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiamen Bank and Shenzhen Kexin
The main advantage of trading using opposite Xiamen Bank and Shenzhen Kexin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen Bank 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.| Xiamen Bank vs. Kweichow Moutai Co | Xiamen Bank vs. Contemporary Amperex Technology | Xiamen Bank vs. G bits Network Technology | Xiamen Bank vs. BYD Co Ltd |
| Shenzhen Kexin vs. Hainan Mining Co | Shenzhen Kexin vs. China Construction Bank | Shenzhen Kexin vs. Western Metal Materials | Shenzhen Kexin vs. Xiamen Bank 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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