Correlation Between China Citic and Shenzhen Fortune
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By analyzing existing cross correlation between China Citic Bank and Shenzhen Fortune Trend, you can compare the effects of market volatilities on China Citic and Shenzhen Fortune 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 Citic with a short position of Shenzhen Fortune. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Citic and Shenzhen Fortune.
Diversification Opportunities for China Citic and Shenzhen Fortune
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Shenzhen is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding China Citic Bank and Shenzhen Fortune Trend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Fortune Trend and China Citic 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 Citic Bank are associated (or correlated) with Shenzhen Fortune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Fortune Trend has no effect on the direction of China Citic i.e., China Citic and Shenzhen Fortune go up and down completely randomly.
Pair Corralation between China Citic and Shenzhen Fortune
Assuming the 90 days trading horizon China Citic Bank is expected to under-perform the Shenzhen Fortune. But the stock apears to be less risky and, when comparing its historical volatility, China Citic Bank is 4.33 times less risky than Shenzhen Fortune. The stock trades about -0.01 of its potential returns per unit of risk. The Shenzhen Fortune Trend is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 15,550 in Shenzhen Fortune Trend on August 28, 2024 and sell it today you would earn a total of 595.00 from holding Shenzhen Fortune Trend or generate 3.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Citic Bank vs. Shenzhen Fortune Trend
Performance |
| Timeline |
| China Citic Bank |
| Shenzhen Fortune Trend |
China Citic and Shenzhen Fortune Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Citic and Shenzhen Fortune
The main advantage of trading using opposite China Citic and Shenzhen Fortune positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Citic position performs unexpectedly, Shenzhen Fortune 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 Fortune will offset losses from the drop in Shenzhen Fortune's long position.| China Citic vs. Chongqing Shunbo Aluminum | China Citic vs. Ping An Insurance | China Citic vs. Ningbo Tech Bank Co | China Citic vs. HeNan Splendor Science |
| Shenzhen Fortune vs. Agricultural Bank of | Shenzhen Fortune vs. Industrial and Commercial | Shenzhen Fortune vs. Bank of China | Shenzhen Fortune vs. PetroChina Co Ltd |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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