Correlation Between Shenzhen International and Ferrovial
Can any of the company-specific risk be diversified away by investing in both Shenzhen International and Ferrovial 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 International and Ferrovial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shenzhen International Holdings and Ferrovial SA, you can compare the effects of market volatilities on Shenzhen International and Ferrovial 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 International with a short position of Ferrovial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen International and Ferrovial.
Diversification Opportunities for Shenzhen International and Ferrovial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shenzhen and Ferrovial is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen International Holding and Ferrovial SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferrovial SA and Shenzhen International 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 International Holdings are associated (or correlated) with Ferrovial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferrovial SA has no effect on the direction of Shenzhen International i.e., Shenzhen International and Ferrovial go up and down completely randomly.
Pair Corralation between Shenzhen International and Ferrovial
Assuming the 90 days horizon Shenzhen International Holdings is expected to generate 4.57 times more return on investment than Ferrovial. However, Shenzhen International is 4.57 times more volatile than Ferrovial SA. It trades about 0.04 of its potential returns per unit of risk. Ferrovial SA is currently generating about 0.05 per unit of risk. 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 |
Shenzhen International Holding vs. Ferrovial SA
Performance |
| Timeline |
| Shenzhen International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ferrovial SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shenzhen International and Ferrovial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen International and Ferrovial
The main advantage of trading using opposite Shenzhen International and Ferrovial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen International position performs unexpectedly, Ferrovial 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 Ferrovial will offset losses from the drop in Ferrovial's long position.| Shenzhen International vs. Zhejiang Expressway Co | Shenzhen International vs. Jiangsu Expressway Co | Shenzhen International vs. Jiangsu Expressway | Shenzhen International vs. Verra Mobility Corp |
| Ferrovial vs. Vinci SA ADR | Ferrovial vs. Geberit AG ADR | Ferrovial vs. Kone Oyj ADR | Ferrovial vs. Kuehne Nagel 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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