Correlation Between Fujian Newland and Guangdong Shenglu
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By analyzing existing cross correlation between Fujian Newland Computer and Guangdong Shenglu Telecommunication, you can compare the effects of market volatilities on Fujian Newland and Guangdong Shenglu 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 Fujian Newland with a short position of Guangdong Shenglu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Newland and Guangdong Shenglu.
Diversification Opportunities for Fujian Newland and Guangdong Shenglu
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fujian and Guangdong is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Newland Computer and Guangdong Shenglu Telecommunic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Shenglu and Fujian Newland 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 Fujian Newland Computer are associated (or correlated) with Guangdong Shenglu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Shenglu has no effect on the direction of Fujian Newland i.e., Fujian Newland and Guangdong Shenglu go up and down completely randomly.
Pair Corralation between Fujian Newland and Guangdong Shenglu
Assuming the 90 days trading horizon Fujian Newland Computer is expected to generate 0.88 times more return on investment than Guangdong Shenglu. However, Fujian Newland Computer is 1.14 times less risky than Guangdong Shenglu. It trades about 0.05 of its potential returns per unit of risk. Guangdong Shenglu Telecommunication is currently generating about -0.02 per unit of risk. If you would invest 1,306 in Fujian Newland Computer on September 26, 2024 and sell it today you would earn a total of 751.00 from holding Fujian Newland Computer or generate 57.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Fujian Newland Computer vs. Guangdong Shenglu Telecommunic
Performance |
Timeline |
Fujian Newland Computer |
Guangdong Shenglu |
Fujian Newland and Guangdong Shenglu Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fujian Newland and Guangdong Shenglu
The main advantage of trading using opposite Fujian Newland and Guangdong Shenglu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Newland position performs unexpectedly, Guangdong Shenglu 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 Guangdong Shenglu will offset losses from the drop in Guangdong Shenglu's long position.Fujian Newland vs. Industrial and Commercial | Fujian Newland vs. Agricultural Bank of | Fujian Newland vs. China Construction Bank | Fujian Newland vs. Bank of China |
Guangdong Shenglu vs. Dongfeng Automobile Co | Guangdong Shenglu vs. China Mobile Limited | Guangdong Shenglu vs. Railway Signal Communication | Guangdong Shenglu vs. Dareway Software Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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