Correlation Between Shenzhen International and Jiangsu Expressway
Can any of the company-specific risk be diversified away by investing in both Shenzhen International and Jiangsu Expressway 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 Jiangsu Expressway 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 Jiangsu Expressway, you can compare the effects of market volatilities on Shenzhen International and Jiangsu Expressway 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 Jiangsu Expressway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen International and Jiangsu Expressway.
Diversification Opportunities for Shenzhen International and Jiangsu Expressway
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shenzhen and Jiangsu is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen International Holding and Jiangsu Expressway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Expressway 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 Jiangsu Expressway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Expressway has no effect on the direction of Shenzhen International i.e., Shenzhen International and Jiangsu Expressway go up and down completely randomly.
Pair Corralation between Shenzhen International and Jiangsu Expressway
Assuming the 90 days horizon Shenzhen International Holdings is expected to generate 4.75 times more return on investment than Jiangsu Expressway. However, Shenzhen International is 4.75 times more volatile than Jiangsu Expressway. It trades about 0.11 of its potential returns per unit of risk. Jiangsu Expressway is currently generating about 0.03 per unit of risk. If you would invest 45.00 in Shenzhen International Holdings on August 29, 2024 and sell it today you would earn a total of 43.00 from holding Shenzhen International Holdings or generate 95.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 61.54% |
| Values | Daily Returns |
Shenzhen International Holding vs. Jiangsu Expressway
Performance |
| Timeline |
| Shenzhen International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Jiangsu Expressway |
Shenzhen International and Jiangsu Expressway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen International and Jiangsu Expressway
The main advantage of trading using opposite Shenzhen International and Jiangsu Expressway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen International position performs unexpectedly, Jiangsu Expressway 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 Jiangsu Expressway will offset losses from the drop in Jiangsu Expressway'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 |
| Jiangsu Expressway vs. Verra Mobility Corp | Jiangsu Expressway vs. HUMANA INC | Jiangsu Expressway vs. Aquagold International | Jiangsu Expressway vs. Barloworld Ltd ADR |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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