Correlation Between Quectel Wireless and Shenzhen Urban
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By analyzing existing cross correlation between Quectel Wireless Solutions and Shenzhen Urban Transport, you can compare the effects of market volatilities on Quectel Wireless and Shenzhen Urban 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 Quectel Wireless with a short position of Shenzhen Urban. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quectel Wireless and Shenzhen Urban.
Diversification Opportunities for Quectel Wireless and Shenzhen Urban
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Quectel and Shenzhen is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Quectel Wireless Solutions and Shenzhen Urban Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Urban Transport and Quectel Wireless 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 Quectel Wireless Solutions are associated (or correlated) with Shenzhen Urban. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Urban Transport has no effect on the direction of Quectel Wireless i.e., Quectel Wireless and Shenzhen Urban go up and down completely randomly.
Pair Corralation between Quectel Wireless and Shenzhen Urban
Assuming the 90 days trading horizon Quectel Wireless is expected to generate 4.61 times less return on investment than Shenzhen Urban. But when comparing it to its historical volatility, Quectel Wireless Solutions is 1.27 times less risky than Shenzhen Urban. It trades about 0.02 of its potential returns per unit of risk. Shenzhen Urban Transport is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,257 in Shenzhen Urban Transport on November 7, 2024 and sell it today you would earn a total of 2,901 from holding Shenzhen Urban Transport or generate 230.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quectel Wireless Solutions vs. Shenzhen Urban Transport
Performance |
| Timeline |
| Quectel Wireless Sol |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Shenzhen Urban Transport |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Quectel Wireless and Shenzhen Urban Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quectel Wireless and Shenzhen Urban
The main advantage of trading using opposite Quectel Wireless and Shenzhen Urban positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quectel Wireless position performs unexpectedly, Shenzhen Urban 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 Urban will offset losses from the drop in Shenzhen Urban's long position.The idea behind Quectel Wireless Solutions and Shenzhen Urban Transport 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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