Correlation Between Henan Shenhuo and Fuzhou Rockchip
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By analyzing existing cross correlation between Henan Shenhuo Coal and Fuzhou Rockchip Electronics, you can compare the effects of market volatilities on Henan Shenhuo and Fuzhou Rockchip 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 Henan Shenhuo with a short position of Fuzhou Rockchip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henan Shenhuo and Fuzhou Rockchip.
Diversification Opportunities for Henan Shenhuo and Fuzhou Rockchip
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Henan and Fuzhou is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Henan Shenhuo Coal and Fuzhou Rockchip Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuzhou Rockchip Elec and Henan Shenhuo 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 Henan Shenhuo Coal are associated (or correlated) with Fuzhou Rockchip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuzhou Rockchip Elec has no effect on the direction of Henan Shenhuo i.e., Henan Shenhuo and Fuzhou Rockchip go up and down completely randomly.
Pair Corralation between Henan Shenhuo and Fuzhou Rockchip
Assuming the 90 days trading horizon Henan Shenhuo Coal is expected to under-perform the Fuzhou Rockchip. But the stock apears to be less risky and, when comparing its historical volatility, Henan Shenhuo Coal is 1.62 times less risky than Fuzhou Rockchip. The stock trades about -0.05 of its potential returns per unit of risk. The Fuzhou Rockchip Electronics is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 7,148 in Fuzhou Rockchip Electronics on October 6, 2024 and sell it today you would earn a total of 2,801 from holding Fuzhou Rockchip Electronics or generate 39.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Henan Shenhuo Coal vs. Fuzhou Rockchip Electronics
Performance |
Timeline |
Henan Shenhuo Coal |
Fuzhou Rockchip Elec |
Henan Shenhuo and Fuzhou Rockchip Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Henan Shenhuo and Fuzhou Rockchip
The main advantage of trading using opposite Henan Shenhuo and Fuzhou Rockchip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henan Shenhuo position performs unexpectedly, Fuzhou Rockchip 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 Fuzhou Rockchip will offset losses from the drop in Fuzhou Rockchip's long position.Henan Shenhuo vs. Chengtun Mining Group | ||
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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