Correlation Between Shenzhen Fortune and Hunan Tyen
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By analyzing existing cross correlation between Shenzhen Fortune Trend and Hunan Tyen Machinery, you can compare the effects of market volatilities on Shenzhen Fortune and Hunan Tyen 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 Tyen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Fortune and Hunan Tyen.
Diversification Opportunities for Shenzhen Fortune and Hunan Tyen
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Hunan is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Fortune Trend and Hunan Tyen Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Tyen Machinery 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 Tyen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Tyen Machinery has no effect on the direction of Shenzhen Fortune i.e., Shenzhen Fortune and Hunan Tyen go up and down completely randomly.
Pair Corralation between Shenzhen Fortune and Hunan Tyen
Assuming the 90 days trading horizon Shenzhen Fortune Trend is expected to generate 1.49 times more return on investment than Hunan Tyen. However, Shenzhen Fortune is 1.49 times more volatile than Hunan Tyen Machinery. It trades about 0.05 of its potential returns per unit of risk. Hunan Tyen Machinery is currently generating about -0.06 per unit of risk. If you would invest 15,550 in Shenzhen Fortune Trend on August 29, 2024 and sell it today you would earn a total of 431.00 from holding Shenzhen Fortune Trend or generate 2.77% 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 Tyen Machinery
Performance |
| Timeline |
| Shenzhen Fortune Trend |
| Hunan Tyen Machinery |
Shenzhen Fortune and Hunan Tyen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Fortune and Hunan Tyen
The main advantage of trading using opposite Shenzhen Fortune and Hunan Tyen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Fortune position performs unexpectedly, Hunan Tyen 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 Tyen will offset losses from the drop in Hunan Tyen's long position.| Shenzhen Fortune vs. Agricultural Bank of | Shenzhen Fortune vs. Industrial and Commercial | Shenzhen Fortune vs. Bank of China | Shenzhen Fortune vs. PetroChina Co Ltd |
| Hunan Tyen vs. China State Construction | Hunan Tyen vs. Huafa Industrial Co | Hunan Tyen vs. China International Capital | Hunan Tyen vs. Kweichow Moutai 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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