Correlation Between Shenzhen Fortune and Tieling Newcity

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Can any of the company-specific risk be diversified away by investing in both Shenzhen Fortune and Tieling Newcity 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 Fortune and Tieling Newcity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shenzhen Fortune Trend and Tieling Newcity Investment, you can compare the effects of market volatilities on Shenzhen Fortune and Tieling Newcity 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 Fortune with a short position of Tieling Newcity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Fortune and Tieling Newcity.

Diversification Opportunities for Shenzhen Fortune and Tieling Newcity

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Shenzhen and Tieling is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Fortune Trend and Tieling Newcity Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tieling Newcity Inve and Shenzhen Fortune 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 Fortune Trend are associated (or correlated) with Tieling Newcity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tieling Newcity Inve has no effect on the direction of Shenzhen Fortune i.e., Shenzhen Fortune and Tieling Newcity go up and down completely randomly.

Pair Corralation between Shenzhen Fortune and Tieling Newcity

If you would invest  205.00  in Tieling Newcity Investment on September 9, 2024 and sell it today you would earn a total of  85.00  from holding Tieling Newcity Investment or generate 41.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Shenzhen Fortune Trend  vs.  Tieling Newcity Investment

 Performance 
       Timeline  
Shenzhen Fortune Trend 

Risk-Adjusted Performance

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Weak
 
Strong
Solid
Over the last 90 days Shenzhen Fortune Trend has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Shenzhen Fortune is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Tieling Newcity Inve 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Tieling Newcity Investment are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Tieling Newcity sustained solid returns over the last few months and may actually be approaching a breakup point.

Shenzhen Fortune and Tieling Newcity Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Shenzhen Fortune and Tieling Newcity

The main advantage of trading using opposite Shenzhen Fortune and Tieling Newcity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Fortune position performs unexpectedly, Tieling Newcity 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 Tieling Newcity will offset losses from the drop in Tieling Newcity's long position.
The idea behind Shenzhen Fortune Trend and Tieling Newcity Investment 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.
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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