Correlation Between Shenzhen Investment and CHKEZ Old
Can any of the company-specific risk be diversified away by investing in both Shenzhen Investment and CHKEZ Old 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 Shenzhen Investment and CHKEZ Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shenzhen Investment Holdings and CHKEZ Old, you can compare the effects of market volatilities on Shenzhen Investment and CHKEZ Old 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 Investment with a short position of CHKEZ Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Investment and CHKEZ Old.
Diversification Opportunities for Shenzhen Investment and CHKEZ Old
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shenzhen and CHKEZ is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Investment Holdings and CHKEZ Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHKEZ Old and Shenzhen Investment 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 Investment Holdings are associated (or correlated) with CHKEZ Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHKEZ Old has no effect on the direction of Shenzhen Investment i.e., Shenzhen Investment and CHKEZ Old go up and down completely randomly.
Pair Corralation between Shenzhen Investment and CHKEZ Old
Assuming the 90 days horizon Shenzhen Investment Holdings is expected to generate 1.97 times more return on investment than CHKEZ Old. However, Shenzhen Investment is 1.97 times more volatile than CHKEZ Old. It trades about 0.08 of its potential returns per unit of risk. CHKEZ Old is currently generating about 0.0 per unit of risk. If you would invest 5.96 in Shenzhen Investment Holdings on October 9, 2024 and sell it today you would earn a total of 16.04 from holding Shenzhen Investment Holdings or generate 269.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 86.87% |
| Values | Daily Returns |
Shenzhen Investment Holdings vs. CHKEZ Old
Performance |
| Timeline |
| Shenzhen Investment |
| CHKEZ Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shenzhen Investment and CHKEZ Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Investment and CHKEZ Old
The main advantage of trading using opposite Shenzhen Investment and CHKEZ Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Investment position performs unexpectedly, CHKEZ Old 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 CHKEZ Old will offset losses from the drop in CHKEZ Old's long position.| Shenzhen Investment vs. Jiangsu Expressway Co | Shenzhen Investment vs. Jiangsu Expressway | Shenzhen Investment vs. Zhejiang Expressway Co | Shenzhen Investment vs. Yuexiu Transport Infrastructure |
| CHKEZ Old vs. Albemarle | CHKEZ Old vs. ServiceNow | CHKEZ Old vs. Uber Technologies | CHKEZ Old vs. Sapiens International |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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