Correlation Between Xiangyang Automobile and Zhejiang Construction
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By analyzing existing cross correlation between Xiangyang Automobile Bearing and Zhejiang Construction Investment, you can compare the effects of market volatilities on Xiangyang Automobile and Zhejiang Construction 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 Xiangyang Automobile with a short position of Zhejiang Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiangyang Automobile and Zhejiang Construction.
Diversification Opportunities for Xiangyang Automobile and Zhejiang Construction
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xiangyang and Zhejiang is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Xiangyang Automobile Bearing and Zhejiang Construction Investme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Construction and Xiangyang Automobile 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 Xiangyang Automobile Bearing are associated (or correlated) with Zhejiang Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Construction has no effect on the direction of Xiangyang Automobile i.e., Xiangyang Automobile and Zhejiang Construction go up and down completely randomly.
Pair Corralation between Xiangyang Automobile and Zhejiang Construction
Assuming the 90 days trading horizon Xiangyang Automobile Bearing is expected to generate 1.19 times more return on investment than Zhejiang Construction. However, Xiangyang Automobile is 1.19 times more volatile than Zhejiang Construction Investment. It trades about 0.03 of its potential returns per unit of risk. Zhejiang Construction Investment is currently generating about -0.03 per unit of risk. If you would invest 516.00 in Xiangyang Automobile Bearing on August 30, 2024 and sell it today you would earn a total of 61.00 from holding Xiangyang Automobile Bearing or generate 11.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Xiangyang Automobile Bearing vs. Zhejiang Construction Investme
Performance |
| Timeline |
| Xiangyang Automobile |
| Zhejiang Construction |
Xiangyang Automobile and Zhejiang Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiangyang Automobile and Zhejiang Construction
The main advantage of trading using opposite Xiangyang Automobile and Zhejiang Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiangyang Automobile position performs unexpectedly, Zhejiang Construction 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 Construction will offset losses from the drop in Zhejiang Construction's long position.| Xiangyang Automobile vs. Agricultural Bank of | Xiangyang Automobile vs. Industrial and Commercial | Xiangyang Automobile vs. Bank of China | Xiangyang Automobile vs. China Construction Bank |
| Zhejiang Construction vs. Agricultural Bank of | Zhejiang Construction vs. Industrial and Commercial | Zhejiang Construction vs. Bank of China | Zhejiang Construction vs. China Construction Bank |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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