Correlation Between Ferrovial and Shenzhen International

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

By analyzing existing cross correlation between Ferrovial SA and Shenzhen International Holdings, you can compare the effects of market volatilities on Ferrovial and Shenzhen International 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 Ferrovial with a short position of Shenzhen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferrovial and Shenzhen International.

Diversification Opportunities for Ferrovial and Shenzhen International

0.0

Correlation Coefficient

Ferrovial  Shenzhen International

Pay attention - limited upside

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

Pair Corralation between Ferrovial and Shenzhen International

If you would invest  88.00  in Shenzhen International Holdings on October 8, 2024 and sell it today you would earn a total of  0.00  from holding Shenzhen International Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ferrovial SA  vs.  Shenzhen International Holding

Ferrovial SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ferrovial SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Ferrovial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Shenzhen International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shenzhen International Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Shenzhen International is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ferrovial and Shenzhen International

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

The idea behind Ferrovial SA and Shenzhen International Holdings 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.