Correlation Between Shenzhen Fortune and Sichuan Yahua
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By analyzing existing cross correlation between Shenzhen Fortune Trend and Sichuan Yahua Industrial, you can compare the effects of market volatilities on Shenzhen Fortune and Sichuan Yahua 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 Sichuan Yahua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Fortune and Sichuan Yahua.
Diversification Opportunities for Shenzhen Fortune and Sichuan Yahua
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shenzhen and Sichuan is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Fortune Trend and Sichuan Yahua Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Yahua Industrial 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 Sichuan Yahua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Yahua Industrial has no effect on the direction of Shenzhen Fortune i.e., Shenzhen Fortune and Sichuan Yahua go up and down completely randomly.
Pair Corralation between Shenzhen Fortune and Sichuan Yahua
Assuming the 90 days trading horizon Shenzhen Fortune is expected to generate 1.08 times less return on investment than Sichuan Yahua. In addition to that, Shenzhen Fortune is 1.76 times more volatile than Sichuan Yahua Industrial. It trades about 0.07 of its total potential returns per unit of risk. Sichuan Yahua Industrial is currently generating about 0.14 per unit of volatility. If you would invest 1,185 in Sichuan Yahua Industrial on September 12, 2024 and sell it today you would earn a total of 97.00 from holding Sichuan Yahua Industrial or generate 8.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shenzhen Fortune Trend vs. Sichuan Yahua Industrial
Performance |
| Timeline |
| Shenzhen Fortune Trend |
| Sichuan Yahua Industrial |
Shenzhen Fortune and Sichuan Yahua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Fortune and Sichuan Yahua
The main advantage of trading using opposite Shenzhen Fortune and Sichuan Yahua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Fortune position performs unexpectedly, Sichuan Yahua 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 Sichuan Yahua will offset losses from the drop in Sichuan Yahua's long position.| Shenzhen Fortune vs. Sichuan Yahua Industrial | Shenzhen Fortune vs. Pengxin International Mining | Shenzhen Fortune vs. Ningbo Ligong Online | Shenzhen Fortune vs. Ye Chiu Metal |
| Sichuan Yahua vs. Zijin Mining Group | Sichuan Yahua vs. Wanhua Chemical Group | Sichuan Yahua vs. Baoshan Iron Steel | Sichuan Yahua vs. Rongsheng Petrochemical Co |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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