Correlation Between Shenyang Huitian and Zhejiang Weixing
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By analyzing existing cross correlation between Shenyang Huitian Thermal and Zhejiang Weixing New, you can compare the effects of market volatilities on Shenyang Huitian and Zhejiang Weixing 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 Shenyang Huitian with a short position of Zhejiang Weixing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Huitian and Zhejiang Weixing.
Diversification Opportunities for Shenyang Huitian and Zhejiang Weixing
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenyang and Zhejiang is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Huitian Thermal and Zhejiang Weixing New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Weixing New and Shenyang Huitian 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 Shenyang Huitian Thermal are associated (or correlated) with Zhejiang Weixing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Weixing New has no effect on the direction of Shenyang Huitian i.e., Shenyang Huitian and Zhejiang Weixing go up and down completely randomly.
Pair Corralation between Shenyang Huitian and Zhejiang Weixing
Assuming the 90 days trading horizon Shenyang Huitian Thermal is expected to generate 1.27 times more return on investment than Zhejiang Weixing. However, Shenyang Huitian is 1.27 times more volatile than Zhejiang Weixing New. It trades about 0.06 of its potential returns per unit of risk. Zhejiang Weixing New is currently generating about -0.02 per unit of risk. If you would invest 257.00 in Shenyang Huitian Thermal on August 26, 2024 and sell it today you would earn a total of 98.00 from holding Shenyang Huitian Thermal or generate 38.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.62% |
| Values | Daily Returns |
Shenyang Huitian Thermal vs. Zhejiang Weixing New
Performance |
| Timeline |
| Shenyang Huitian Thermal |
| Zhejiang Weixing New |
Shenyang Huitian and Zhejiang Weixing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenyang Huitian and Zhejiang Weixing
The main advantage of trading using opposite Shenyang Huitian and Zhejiang Weixing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Huitian position performs unexpectedly, Zhejiang Weixing 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 Weixing will offset losses from the drop in Zhejiang Weixing's long position.| Shenyang Huitian vs. Ningbo MedicalSystem Biotechnology | Shenyang Huitian vs. Huatian Hotel Group | Shenyang Huitian vs. HeNan Splendor Science | Shenyang Huitian vs. Agricultural Bank of |
| Zhejiang Weixing vs. Agricultural Bank of | Zhejiang Weixing vs. Industrial and Commercial | Zhejiang Weixing vs. Bank of China | Zhejiang Weixing 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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