Correlation Between Shenzhen Zhongzhuang and Shenzhen Kexin
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By analyzing existing cross correlation between Shenzhen Zhongzhuang Construction and Shenzhen Kexin Communication, you can compare the effects of market volatilities on Shenzhen Zhongzhuang and Shenzhen Kexin 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 Zhongzhuang with a short position of Shenzhen Kexin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Zhongzhuang and Shenzhen Kexin.
Diversification Opportunities for Shenzhen Zhongzhuang and Shenzhen Kexin
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shenzhen and Shenzhen is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Zhongzhuang Construct and Shenzhen Kexin Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Kexin Commu and Shenzhen Zhongzhuang 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 Zhongzhuang Construction are associated (or correlated) with Shenzhen Kexin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Kexin Commu has no effect on the direction of Shenzhen Zhongzhuang i.e., Shenzhen Zhongzhuang and Shenzhen Kexin go up and down completely randomly.
Pair Corralation between Shenzhen Zhongzhuang and Shenzhen Kexin
Assuming the 90 days trading horizon Shenzhen Zhongzhuang Construction is expected to generate 1.05 times more return on investment than Shenzhen Kexin. However, Shenzhen Zhongzhuang is 1.05 times more volatile than Shenzhen Kexin Communication. It trades about 0.21 of its potential returns per unit of risk. Shenzhen Kexin Communication is currently generating about -0.12 per unit of risk. If you would invest 247.00 in Shenzhen Zhongzhuang Construction on October 31, 2024 and sell it today you would earn a total of 133.00 from holding Shenzhen Zhongzhuang Construction or generate 53.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Shenzhen Zhongzhuang Construct vs. Shenzhen Kexin Communication
Performance |
Timeline |
Shenzhen Zhongzhuang |
Shenzhen Kexin Commu |
Shenzhen Zhongzhuang and Shenzhen Kexin Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shenzhen Zhongzhuang and Shenzhen Kexin
The main advantage of trading using opposite Shenzhen Zhongzhuang and Shenzhen Kexin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Zhongzhuang position performs unexpectedly, Shenzhen Kexin 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 Shenzhen Kexin will offset losses from the drop in Shenzhen Kexin's long position.Shenzhen Zhongzhuang vs. Wuhan Yangtze Communication | ||
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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