Correlation Between Shenzhen Fortune and Yunnan Yuntou
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By analyzing existing cross correlation between Shenzhen Fortune Trend and Yunnan Yuntou Ecology, you can compare the effects of market volatilities on Shenzhen Fortune and Yunnan Yuntou 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 Yunnan Yuntou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Fortune and Yunnan Yuntou.
Diversification Opportunities for Shenzhen Fortune and Yunnan Yuntou
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shenzhen and Yunnan is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Fortune Trend and Yunnan Yuntou Ecology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunnan Yuntou Ecology 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 Yunnan Yuntou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunnan Yuntou Ecology has no effect on the direction of Shenzhen Fortune i.e., Shenzhen Fortune and Yunnan Yuntou go up and down completely randomly.
Pair Corralation between Shenzhen Fortune and Yunnan Yuntou
Assuming the 90 days trading horizon Shenzhen Fortune Trend is expected to generate 3.07 times more return on investment than Yunnan Yuntou. However, Shenzhen Fortune is 3.07 times more volatile than Yunnan Yuntou Ecology. It trades about 0.06 of its potential returns per unit of risk. Yunnan Yuntou Ecology is currently generating about 0.16 per unit of risk. If you would invest 15,756 in Shenzhen Fortune Trend on August 30, 2024 and sell it today you would earn a total of 994.00 from holding Shenzhen Fortune Trend or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Fortune Trend vs. Yunnan Yuntou Ecology
Performance |
| Timeline |
| Shenzhen Fortune Trend |
| Yunnan Yuntou Ecology |
Shenzhen Fortune and Yunnan Yuntou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Fortune and Yunnan Yuntou
The main advantage of trading using opposite Shenzhen Fortune and Yunnan Yuntou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Fortune position performs unexpectedly, Yunnan Yuntou 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 Yunnan Yuntou will offset losses from the drop in Yunnan Yuntou's long position.| Shenzhen Fortune vs. Hainan Haiqi Transportation | Shenzhen Fortune vs. Fujian Longzhou Transportation | Shenzhen Fortune vs. Tongling Nonferrous Metals | Shenzhen Fortune vs. Sichuan Fulin Transportation |
| Yunnan Yuntou vs. BYD Co Ltd | Yunnan Yuntou vs. China Mobile Limited | Yunnan Yuntou vs. Agricultural Bank of | Yunnan Yuntou vs. Industrial and Commercial |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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