Correlation Between Ferrovial and Shenzhen Investment
Can any of the company-specific risk be diversified away by investing in both Ferrovial and Shenzhen Investment at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ferrovial and Shenzhen Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferrovial and Shenzhen Investment Holdings, you can compare the effects of market volatilities on Ferrovial and Shenzhen 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 Ferrovial with a short position of Shenzhen Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferrovial and Shenzhen Investment.
Diversification Opportunities for Ferrovial and Shenzhen Investment
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ferrovial and Shenzhen is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ferrovial and Shenzhen Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Investment and Ferrovial 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 Ferrovial are associated (or correlated) with Shenzhen Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Investment has no effect on the direction of Ferrovial i.e., Ferrovial and Shenzhen Investment go up and down completely randomly.
Pair Corralation between Ferrovial and Shenzhen Investment
If you would invest 21.00 in Shenzhen Investment Holdings on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Shenzhen Investment Holdings or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Ferrovial vs. Shenzhen Investment Holdings
Performance |
| Timeline |
| Ferrovial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shenzhen Investment |
Ferrovial and Shenzhen Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferrovial and Shenzhen Investment
The main advantage of trading using opposite Ferrovial and Shenzhen Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferrovial position performs unexpectedly, Shenzhen 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 Shenzhen Investment will offset losses from the drop in Shenzhen Investment's long position.| Ferrovial vs. Playtika Holding Corp | Ferrovial vs. Supercom | Ferrovial vs. Integral Ad Science | Ferrovial vs. Pinterest |
| Shenzhen Investment vs. Jiangsu Expressway Co | Shenzhen Investment vs. Jiangsu Expressway | Shenzhen Investment vs. Zhejiang Expressway Co | Shenzhen Investment vs. Yuexiu Transport Infrastructure |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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