Correlation Between Jiaozuo Wanfang and Zhejiang Yinlun
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By analyzing existing cross correlation between Jiaozuo Wanfang Aluminum and Zhejiang Yinlun Machinery, you can compare the effects of market volatilities on Jiaozuo Wanfang and Zhejiang Yinlun 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 Jiaozuo Wanfang with a short position of Zhejiang Yinlun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiaozuo Wanfang and Zhejiang Yinlun.
Diversification Opportunities for Jiaozuo Wanfang and Zhejiang Yinlun
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jiaozuo and Zhejiang is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Jiaozuo Wanfang Aluminum and Zhejiang Yinlun Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Yinlun Machinery and Jiaozuo Wanfang 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 Jiaozuo Wanfang Aluminum are associated (or correlated) with Zhejiang Yinlun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Yinlun Machinery has no effect on the direction of Jiaozuo Wanfang i.e., Jiaozuo Wanfang and Zhejiang Yinlun go up and down completely randomly.
Pair Corralation between Jiaozuo Wanfang and Zhejiang Yinlun
Assuming the 90 days trading horizon Jiaozuo Wanfang Aluminum is expected to under-perform the Zhejiang Yinlun. But the stock apears to be less risky and, when comparing its historical volatility, Jiaozuo Wanfang Aluminum is 1.48 times less risky than Zhejiang Yinlun. The stock trades about -0.03 of its potential returns per unit of risk. The Zhejiang Yinlun Machinery is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,740 in Zhejiang Yinlun Machinery on October 14, 2024 and sell it today you would earn a total of 162.00 from holding Zhejiang Yinlun Machinery or generate 9.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiaozuo Wanfang Aluminum vs. Zhejiang Yinlun Machinery
Performance |
| Timeline |
| Jiaozuo Wanfang Aluminum |
| Zhejiang Yinlun Machinery |
Jiaozuo Wanfang and Zhejiang Yinlun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiaozuo Wanfang and Zhejiang Yinlun
The main advantage of trading using opposite Jiaozuo Wanfang and Zhejiang Yinlun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiaozuo Wanfang position performs unexpectedly, Zhejiang Yinlun 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 Zhejiang Yinlun will offset losses from the drop in Zhejiang Yinlun's long position.| Jiaozuo Wanfang vs. Bomesc Offshore Engineering | Jiaozuo Wanfang vs. China Eastern Airlines | Jiaozuo Wanfang vs. Dongfeng Automobile Co | Jiaozuo Wanfang vs. Guangdong Jingyi Metal |
| Zhejiang Yinlun vs. Runjian Communication Co | Zhejiang Yinlun vs. Guangdong Shenglu Telecommunication | Zhejiang Yinlun vs. Jiaozuo Wanfang Aluminum | Zhejiang Yinlun vs. Chongqing Shunbo Aluminum |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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