Correlation Between Easyhome New and Suzhou Weizhixiang
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By analyzing existing cross correlation between Easyhome New Retail and Suzhou Weizhixiang Food, you can compare the effects of market volatilities on Easyhome New and Suzhou Weizhixiang 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 Easyhome New with a short position of Suzhou Weizhixiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Easyhome New and Suzhou Weizhixiang.
Diversification Opportunities for Easyhome New and Suzhou Weizhixiang
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Easyhome and Suzhou is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Easyhome New Retail and Suzhou Weizhixiang Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou Weizhixiang Food and Easyhome New 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 Easyhome New Retail are associated (or correlated) with Suzhou Weizhixiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou Weizhixiang Food has no effect on the direction of Easyhome New i.e., Easyhome New and Suzhou Weizhixiang go up and down completely randomly.
Pair Corralation between Easyhome New and Suzhou Weizhixiang
Assuming the 90 days trading horizon Easyhome New Retail is expected to under-perform the Suzhou Weizhixiang. In addition to that, Easyhome New is 2.22 times more volatile than Suzhou Weizhixiang Food. It trades about -0.25 of its total potential returns per unit of risk. Suzhou Weizhixiang Food is currently generating about -0.02 per unit of volatility. If you would invest 2,313 in Suzhou Weizhixiang Food on November 8, 2024 and sell it today you would lose (17.00) from holding Suzhou Weizhixiang Food or give up 0.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Easyhome New Retail vs. Suzhou Weizhixiang Food
Performance |
| Timeline |
| Easyhome New Retail |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Suzhou Weizhixiang Food |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Easyhome New and Suzhou Weizhixiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Easyhome New and Suzhou Weizhixiang
The main advantage of trading using opposite Easyhome New and Suzhou Weizhixiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Easyhome New position performs unexpectedly, Suzhou Weizhixiang 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 Suzhou Weizhixiang will offset losses from the drop in Suzhou Weizhixiang's long position.The idea behind Easyhome New Retail and Suzhou Weizhixiang Food 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.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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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