Correlation Between Digital China and Zhongfu Information
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By analyzing existing cross correlation between Digital China Information and Zhongfu Information, you can compare the effects of market volatilities on Digital China and Zhongfu Information 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 Digital China with a short position of Zhongfu Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital China and Zhongfu Information.
Diversification Opportunities for Digital China and Zhongfu Information
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Digital and Zhongfu is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Digital China Information and Zhongfu Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongfu Information and Digital China 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 Digital China Information are associated (or correlated) with Zhongfu Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongfu Information has no effect on the direction of Digital China i.e., Digital China and Zhongfu Information go up and down completely randomly.
Pair Corralation between Digital China and Zhongfu Information
Assuming the 90 days trading horizon Digital China Information is expected to generate 0.71 times more return on investment than Zhongfu Information. However, Digital China Information is 1.42 times less risky than Zhongfu Information. It trades about 0.0 of its potential returns per unit of risk. Zhongfu Information is currently generating about -0.01 per unit of risk. If you would invest 1,166 in Digital China Information on October 12, 2024 and sell it today you would lose (150.00) from holding Digital China Information or give up 12.86% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Digital China Information vs. Zhongfu Information
Performance |
Timeline |
Digital China Information |
Zhongfu Information |
Digital China and Zhongfu Information Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Digital China and Zhongfu Information
The main advantage of trading using opposite Digital China and Zhongfu Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital China position performs unexpectedly, Zhongfu Information 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 Zhongfu Information will offset losses from the drop in Zhongfu Information's long position.Digital China vs. China National Software | Digital China vs. GRG Banking Equipment | Digital China vs. Unisplendour Corp | Digital China vs. Bingo Software Co |
Zhongfu Information vs. Ningbo Tech Bank Co | Zhongfu Information vs. Jiangsu Financial Leasing | Zhongfu Information vs. Zhongrun Resources Investment | Zhongfu Information vs. Xiandai Investment Co |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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