Correlation Between Shenzhen Fortune and Hunan Investment
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By analyzing existing cross correlation between Shenzhen Fortune Trend and Hunan Investment Group, you can compare the effects of market volatilities on Shenzhen Fortune and Hunan Investment 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 Shenzhen Fortune with a short position of Hunan Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Fortune and Hunan Investment.
Diversification Opportunities for Shenzhen Fortune and Hunan Investment
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Hunan is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Fortune Trend and Hunan Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Investment and Shenzhen Fortune 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 Shenzhen Fortune Trend are associated (or correlated) with Hunan Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Investment has no effect on the direction of Shenzhen Fortune i.e., Shenzhen Fortune and Hunan Investment go up and down completely randomly.
Pair Corralation between Shenzhen Fortune and Hunan Investment
Assuming the 90 days trading horizon Shenzhen Fortune Trend is expected to generate 1.65 times more return on investment than Hunan Investment. However, Shenzhen Fortune is 1.65 times more volatile than Hunan Investment Group. It trades about 0.15 of its potential returns per unit of risk. Hunan Investment Group is currently generating about 0.23 per unit of risk. If you would invest 15,343 in Shenzhen Fortune Trend on September 5, 2024 and sell it today you would earn a total of 2,877 from holding Shenzhen Fortune Trend or generate 18.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Fortune Trend vs. Hunan Investment Group
Performance |
| Timeline |
| Shenzhen Fortune Trend |
| Hunan Investment |
Shenzhen Fortune and Hunan Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Fortune and Hunan Investment
The main advantage of trading using opposite Shenzhen Fortune and Hunan Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Fortune position performs unexpectedly, Hunan Investment 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 Hunan Investment will offset losses from the drop in Hunan Investment's long position.| Shenzhen Fortune vs. Hunan Mendale Hometextile | Shenzhen Fortune vs. Suofeiya Home Collection | Shenzhen Fortune vs. Nanxing Furniture Machinery | Shenzhen Fortune vs. Cultural Investment Holdings |
| Hunan Investment vs. Cambricon Technologies Corp | Hunan Investment vs. Loongson Technology Corp | Hunan Investment vs. Shenzhen Fortune Trend | Hunan Investment vs. Chongqing Road Bridge |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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