Correlation Between Shenzhen Kexin and Beijing HuaYuanYiTong
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By analyzing existing cross correlation between Shenzhen Kexin Communication and Beijing HuaYuanYiTong Thermal, you can compare the effects of market volatilities on Shenzhen Kexin and Beijing HuaYuanYiTong 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 Kexin with a short position of Beijing HuaYuanYiTong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Kexin and Beijing HuaYuanYiTong.
Diversification Opportunities for Shenzhen Kexin and Beijing HuaYuanYiTong
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Beijing is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Kexin Communication and Beijing HuaYuanYiTong Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing HuaYuanYiTong and Shenzhen Kexin 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 Kexin Communication are associated (or correlated) with Beijing HuaYuanYiTong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing HuaYuanYiTong has no effect on the direction of Shenzhen Kexin i.e., Shenzhen Kexin and Beijing HuaYuanYiTong go up and down completely randomly.
Pair Corralation between Shenzhen Kexin and Beijing HuaYuanYiTong
Assuming the 90 days trading horizon Shenzhen Kexin Communication is expected to generate 1.29 times more return on investment than Beijing HuaYuanYiTong. However, Shenzhen Kexin is 1.29 times more volatile than Beijing HuaYuanYiTong Thermal. It trades about 0.11 of its potential returns per unit of risk. Beijing HuaYuanYiTong Thermal is currently generating about 0.11 per unit of risk. If you would invest 1,061 in Shenzhen Kexin Communication on September 25, 2024 and sell it today you would earn a total of 276.00 from holding Shenzhen Kexin Communication or generate 26.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Shenzhen Kexin Communication vs. Beijing HuaYuanYiTong Thermal
Performance |
Timeline |
Shenzhen Kexin Commu |
Beijing HuaYuanYiTong |
Shenzhen Kexin and Beijing HuaYuanYiTong Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shenzhen Kexin and Beijing HuaYuanYiTong
The main advantage of trading using opposite Shenzhen Kexin and Beijing HuaYuanYiTong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Kexin position performs unexpectedly, Beijing HuaYuanYiTong 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 Beijing HuaYuanYiTong will offset losses from the drop in Beijing HuaYuanYiTong's long position.Shenzhen Kexin vs. Industrial and Commercial | Shenzhen Kexin vs. Agricultural Bank of | Shenzhen Kexin vs. China Construction Bank | Shenzhen Kexin vs. Bank of China |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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