Correlation Between Shenzhen Hans and Vohringer Home

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

By analyzing existing cross correlation between Shenzhen Hans CNC and Vohringer Home Technology, you can compare the effects of market volatilities on Shenzhen Hans and Vohringer Home 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 Hans with a short position of Vohringer Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Hans and Vohringer Home.

Diversification Opportunities for Shenzhen Hans and Vohringer Home

0.66

Correlation Coefficient

Shenzhen Hans  Vohringer Home

Poor diversification

The 3 months correlation between Shenzhen and Vohringer is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Hans CNC and Vohringer Home Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vohringer Home Technology and Shenzhen Hans 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 Hans CNC are associated (or correlated) with Vohringer Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vohringer Home Technology has no effect on the direction of Shenzhen Hans i.e., Shenzhen Hans and Vohringer Home go up and down completely randomly.

Pair Corralation between Shenzhen Hans and Vohringer Home

Assuming the 90 days trading horizon Shenzhen Hans is expected to generate 5.45 times less return on investment than Vohringer Home. But when comparing it to its historical volatility, Shenzhen Hans CNC is 1.24 times less risky than Vohringer Home. It trades about 0.0 of its potential returns per unit of risk. Vohringer Home Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  514.00  in Vohringer Home Technology on October 11, 2024 and sell it today you would lose (64.00) from holding Vohringer Home Technology or give up 12.45% of portfolio value over 90 days.

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

Shenzhen Hans CNC  vs.  Vohringer Home Technology

Shenzhen Hans CNC

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen Hans CNC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Shenzhen Hans is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vohringer Home Technology

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vohringer Home Technology are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Vohringer Home sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shenzhen Hans and Vohringer Home

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

The idea behind Shenzhen Hans CNC and Vohringer Home Technology 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.