Correlation Between Shenzhen Investment and Globavend Holdings
Can any of the company-specific risk be diversified away by investing in both Shenzhen Investment and Globavend Holdings 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 Globavend Holdings 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 Globavend Holdings Limited, you can compare the effects of market volatilities on Shenzhen Investment and Globavend Holdings 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 Globavend Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Investment and Globavend Holdings.
Diversification Opportunities for Shenzhen Investment and Globavend Holdings
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shenzhen and Globavend is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Investment Holdings and Globavend Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globavend Holdings 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 Globavend Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globavend Holdings has no effect on the direction of Shenzhen Investment i.e., Shenzhen Investment and Globavend Holdings go up and down completely randomly.
Pair Corralation between Shenzhen Investment and Globavend Holdings
Assuming the 90 days horizon Shenzhen Investment Holdings is expected to generate 0.54 times more return on investment than Globavend Holdings. However, Shenzhen Investment Holdings is 1.85 times less risky than Globavend Holdings. It trades about 0.08 of its potential returns per unit of risk. Globavend Holdings Limited is currently generating about -0.02 per unit of risk. If you would invest 5.96 in Shenzhen Investment Holdings on November 5, 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 | Insignificant |
| Accuracy | 62.55% |
| Values | Daily Returns |
Shenzhen Investment Holdings vs. Globavend Holdings Limited
Performance |
| Timeline |
| Shenzhen Investment |
| Globavend Holdings |
Shenzhen Investment and Globavend Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Investment and Globavend Holdings
The main advantage of trading using opposite Shenzhen Investment and Globavend Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Investment position performs unexpectedly, Globavend Holdings 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 Globavend Holdings will offset losses from the drop in Globavend Holdings' 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 |
| Globavend Holdings vs. Aptiv PLC | Globavend Holdings vs. Amkor Technology | Globavend Holdings vs. Highway Holdings Limited | Globavend Holdings vs. BRP Inc |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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