Correlation Between Shanghai Yanpu and Shenzhen Kexin
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By analyzing existing cross correlation between Shanghai Yanpu Metal and Shenzhen Kexin Communication, you can compare the effects of market volatilities on Shanghai Yanpu 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 Shanghai Yanpu with a short position of Shenzhen Kexin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yanpu and Shenzhen Kexin.
Diversification Opportunities for Shanghai Yanpu and Shenzhen Kexin
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shanghai and Shenzhen is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yanpu Metal 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 Shanghai Yanpu 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 Shanghai Yanpu Metal 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 Shanghai Yanpu i.e., Shanghai Yanpu and Shenzhen Kexin go up and down completely randomly.
Pair Corralation between Shanghai Yanpu and Shenzhen Kexin
Assuming the 90 days trading horizon Shanghai Yanpu Metal is expected to generate 0.95 times more return on investment than Shenzhen Kexin. However, Shanghai Yanpu Metal is 1.06 times less risky than Shenzhen Kexin. It trades about 0.08 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 3,694 in Shanghai Yanpu Metal on August 28, 2024 and sell it today you would earn a total of 173.00 from holding Shanghai Yanpu Metal or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Yanpu Metal vs. Shenzhen Kexin Communication
Performance |
| Timeline |
| Shanghai Yanpu Metal |
| Shenzhen Kexin Commu |
Shanghai Yanpu and Shenzhen Kexin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Yanpu and Shenzhen Kexin
The main advantage of trading using opposite Shanghai Yanpu and Shenzhen Kexin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yanpu 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.| Shanghai Yanpu vs. Loongson Technology Corp | Shanghai Yanpu vs. Chongqing Road Bridge | Shanghai Yanpu vs. Shenzhen Fortune Trend | Shanghai Yanpu vs. Wuhan Xianglong Power |
| Shenzhen Kexin vs. Shenzhen MYS Environmental | Shenzhen Kexin vs. AVIC Fund Management | Shenzhen Kexin vs. Shenzhen Bingchuan Network | Shenzhen Kexin vs. Penghua Shenzhen Energy |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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