Correlation Between Shenzhen Fortune and Road Environment
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By analyzing existing cross correlation between Shenzhen Fortune Trend and Road Environment Technology, you can compare the effects of market volatilities on Shenzhen Fortune and Road Environment 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 Road Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Fortune and Road Environment.
Diversification Opportunities for Shenzhen Fortune and Road Environment
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shenzhen and Road is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Fortune Trend and Road Environment Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Road Environment Tec 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 Road Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Road Environment Tec has no effect on the direction of Shenzhen Fortune i.e., Shenzhen Fortune and Road Environment go up and down completely randomly.
Pair Corralation between Shenzhen Fortune and Road Environment
Assuming the 90 days trading horizon Shenzhen Fortune Trend is expected to generate 2.01 times more return on investment than Road Environment. However, Shenzhen Fortune is 2.01 times more volatile than Road Environment Technology. It trades about 0.1 of its potential returns per unit of risk. Road Environment Technology is currently generating about 0.0 per unit of risk. If you would invest 15,092 in Shenzhen Fortune Trend on August 25, 2024 and sell it today you would earn a total of 1,474 from holding Shenzhen Fortune Trend or generate 9.77% 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. Road Environment Technology
Performance |
| Timeline |
| Shenzhen Fortune Trend |
| Road Environment Tec |
Shenzhen Fortune and Road Environment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Fortune and Road Environment
The main advantage of trading using opposite Shenzhen Fortune and Road Environment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Fortune position performs unexpectedly, Road Environment 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 Road Environment will offset losses from the drop in Road Environment'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 |
| Road Environment vs. Cambricon Technologies Corp | Road Environment vs. Loongson Technology Corp | Road Environment vs. Chongqing Road Bridge | Road Environment vs. Shenzhen Fortune Trend |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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