Correlation Between Techshine Electronics and Shenzhen Kaifa

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

Diversification Opportunities for Techshine Electronics and Shenzhen Kaifa

0.79
  Correlation Coefficient

Poor diversification

The 3 months correlation between Techshine and Shenzhen is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Techshine Electronics Co and Shenzhen Kaifa Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Kaifa Technology and Techshine Electronics 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 Techshine Electronics Co are associated (or correlated) with Shenzhen Kaifa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Kaifa Technology has no effect on the direction of Techshine Electronics i.e., Techshine Electronics and Shenzhen Kaifa go up and down completely randomly.

Pair Corralation between Techshine Electronics and Shenzhen Kaifa

Assuming the 90 days trading horizon Techshine Electronics Co is expected to generate 1.08 times more return on investment than Shenzhen Kaifa. However, Techshine Electronics is 1.08 times more volatile than Shenzhen Kaifa Technology. It trades about 0.09 of its potential returns per unit of risk. Shenzhen Kaifa Technology is currently generating about 0.1 per unit of risk. If you would invest  2,332  in Techshine Electronics Co on September 9, 2025 and sell it today you would earn a total of  479.00  from holding Techshine Electronics Co or generate 20.54% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy98.33%
ValuesDaily Returns

Techshine Electronics Co  vs.  Shenzhen Kaifa Technology

 Performance 
       Timeline  
Techshine Electronics 

Risk-Adjusted Performance

Mild

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Techshine Electronics Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Techshine Electronics sustained solid returns over the last few months and may actually be approaching a breakup point.
Shenzhen Kaifa Technology 

Risk-Adjusted Performance

Fair

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen Kaifa Technology are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shenzhen Kaifa sustained solid returns over the last few months and may actually be approaching a breakup point.

Techshine Electronics and Shenzhen Kaifa Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Techshine Electronics and Shenzhen Kaifa

The main advantage of trading using opposite Techshine Electronics and Shenzhen Kaifa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Techshine Electronics position performs unexpectedly, Shenzhen Kaifa 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 Kaifa will offset losses from the drop in Shenzhen Kaifa's long position.
The idea behind Techshine Electronics Co and Shenzhen Kaifa 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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