Correlation Between Anhui Transport and Shenzhen Coship
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By analyzing existing cross correlation between Anhui Transport Consulting and Shenzhen Coship Electronics, you can compare the effects of market volatilities on Anhui Transport and Shenzhen Coship 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 Anhui Transport with a short position of Shenzhen Coship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Transport and Shenzhen Coship.
Diversification Opportunities for Anhui Transport and Shenzhen Coship
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Anhui and Shenzhen is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Transport Consulting and Shenzhen Coship Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Coship Elec and Anhui Transport 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 Anhui Transport Consulting are associated (or correlated) with Shenzhen Coship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Coship Elec has no effect on the direction of Anhui Transport i.e., Anhui Transport and Shenzhen Coship go up and down completely randomly.
Pair Corralation between Anhui Transport and Shenzhen Coship
Assuming the 90 days trading horizon Anhui Transport Consulting is expected to under-perform the Shenzhen Coship. But the stock apears to be less risky and, when comparing its historical volatility, Anhui Transport Consulting is 2.46 times less risky than Shenzhen Coship. The stock trades about -0.1 of its potential returns per unit of risk. The Shenzhen Coship Electronics is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 380.00 in Shenzhen Coship Electronics on November 8, 2024 and sell it today you would earn a total of 143.00 from holding Shenzhen Coship Electronics or generate 37.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Transport Consulting vs. Shenzhen Coship Electronics
Performance |
| Timeline |
| Anhui Transport Cons |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shenzhen Coship Elec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Anhui Transport and Shenzhen Coship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Transport and Shenzhen Coship
The main advantage of trading using opposite Anhui Transport and Shenzhen Coship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Transport position performs unexpectedly, Shenzhen Coship 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 Coship will offset losses from the drop in Shenzhen Coship's long position.The idea behind Anhui Transport Consulting and Shenzhen Coship Electronics 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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