Correlation Between China International and Shenzhen
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By analyzing existing cross correlation between China International Travel and Shenzhen AV Display Co, you can compare the effects of market volatilities on China International 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 China International with a short position of Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of China International and Shenzhen.
Diversification Opportunities for China International and Shenzhen
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Shenzhen is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding China International Travel 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 China International 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 China International Travel 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 China International i.e., China International and Shenzhen go up and down completely randomly.
Pair Corralation between China International and Shenzhen
Assuming the 90 days trading horizon China International Travel is expected to under-perform the Shenzhen. But the stock apears to be less risky and, when comparing its historical volatility, China International Travel is 1.9 times less risky than Shenzhen. The stock trades about -0.19 of its potential returns per unit of risk. The Shenzhen AV Display Co is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 3,510 in Shenzhen AV Display Co on November 30, 2024 and sell it today you would lose (396.00) from holding Shenzhen AV Display Co or give up 11.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China International Travel vs. Shenzhen AV Display Co
Performance |
| Timeline |
| China International |
| Shenzhen AV Display |
China International and Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China International and Shenzhen
The main advantage of trading using opposite China International and Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China International 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.| China International vs. Kunshan Dongwei Technology | China International vs. Offcn Education Technology | China International vs. Dhc Software Co | China International vs. Beingmate Baby Child |
| Shenzhen vs. Zhejiang Daily Media | Shenzhen vs. TVZone Media Co | Shenzhen vs. Simei Media Co | Shenzhen vs. Ciwen Media 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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