Correlation Between Shenzhen AV-Display and V V

Can any of the company-specific risk be diversified away by investing in both Shenzhen AV-Display and V V 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 AV-Display and V V into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shenzhen AV Display Co and V V Food, you can compare the effects of market volatilities on Shenzhen AV-Display and V V 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 AV-Display with a short position of V V. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen AV-Display and V V.

Diversification Opportunities for Shenzhen AV-Display and V V

0.44

Correlation Coefficient

Shenzhen AV-Display  V V

Very weak diversification

The 3 months correlation between Shenzhen and 600300 is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen AV Display Co and V V Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V V Food and Shenzhen AV-Display 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 AV Display Co are associated (or correlated) with V V. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V V Food has no effect on the direction of Shenzhen AV-Display i.e., Shenzhen AV-Display and V V go up and down completely randomly.

Pair Corralation between Shenzhen AV-Display and V V

Assuming the 90 days trading horizon Shenzhen AV Display Co is expected to under-perform the V V. But the stock apears to be less risky and, when comparing its historical volatility, Shenzhen AV Display Co is 1.16 times less risky than V V. The stock trades about -0.1 of its potential returns per unit of risk. The V V Food is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  328.00  in V V Food on December 30, 2024 and sell it today you would earn a total of  13.00  from holding V V Food or generate 3.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Shenzhen AV Display Co  vs.  V V Food

Shenzhen AV Display

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shenzhen AV Display Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

V V Food

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in V V Food are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, V V may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Shenzhen AV-Display and V V

The main advantage of trading using opposite Shenzhen AV-Display and V V positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen AV-Display position performs unexpectedly, V V 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 V V will offset losses from the drop in V V's long position.

The idea behind Shenzhen AV Display Co and V V Food pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.