Correlation Between Ferrovial and Shenzhen International
Can any of the company-specific risk be diversified away by investing in both Ferrovial and Shenzhen International 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 International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferrovial SA and Shenzhen International Holdings, you can compare the effects of market volatilities on Ferrovial and Shenzhen International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferrovial and Shenzhen International.
Diversification Opportunities for Ferrovial and Shenzhen International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ferrovial and Shenzhen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ferrovial SA and Shenzhen International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen International 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 SA are associated (or correlated) with Shenzhen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen International has no effect on the direction of Ferrovial i.e., Ferrovial and Shenzhen International go up and down completely randomly.
Pair Corralation between Ferrovial and Shenzhen International
Assuming the 90 days horizon Ferrovial is expected to generate 3.49 times less return on investment than Shenzhen International. But when comparing it to its historical volatility, Ferrovial SA is 4.57 times less risky than Shenzhen International. It trades about 0.05 of its potential returns per unit of risk. Shenzhen International Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 92.00 in Shenzhen International Holdings on August 26, 2024 and sell it today you would lose (4.00) from holding Shenzhen International Holdings or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 64.49% |
| Values | Daily Returns |
Ferrovial SA vs. Shenzhen International Holding
Performance |
| Timeline |
| Ferrovial SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shenzhen International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ferrovial and Shenzhen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferrovial and Shenzhen International
The main advantage of trading using opposite Ferrovial and Shenzhen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferrovial position performs unexpectedly, Shenzhen International 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 International will offset losses from the drop in Shenzhen International's long position.| Ferrovial vs. Vinci SA ADR | Ferrovial vs. Geberit AG ADR | Ferrovial vs. Kone Oyj ADR | Ferrovial vs. Kuehne Nagel International |
| Shenzhen International vs. Zhejiang Expressway Co | Shenzhen International vs. Jiangsu Expressway Co | Shenzhen International vs. Jiangsu Expressway | Shenzhen International vs. Verra Mobility Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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