Correlation Between Yueyang Xingchang and Hangzhou EZVIZ
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By analyzing existing cross correlation between Yueyang Xingchang Petro Chemical and Hangzhou EZVIZ Network, you can compare the effects of market volatilities on Yueyang Xingchang and Hangzhou EZVIZ 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 Yueyang Xingchang with a short position of Hangzhou EZVIZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yueyang Xingchang and Hangzhou EZVIZ.
Diversification Opportunities for Yueyang Xingchang and Hangzhou EZVIZ
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yueyang and Hangzhou is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Yueyang Xingchang Petro Chemic and Hangzhou EZVIZ Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou EZVIZ Network and Yueyang Xingchang 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 Yueyang Xingchang Petro Chemical are associated (or correlated) with Hangzhou EZVIZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou EZVIZ Network has no effect on the direction of Yueyang Xingchang i.e., Yueyang Xingchang and Hangzhou EZVIZ go up and down completely randomly.
Pair Corralation between Yueyang Xingchang and Hangzhou EZVIZ
Assuming the 90 days trading horizon Yueyang Xingchang is expected to generate 61.68 times less return on investment than Hangzhou EZVIZ. But when comparing it to its historical volatility, Yueyang Xingchang Petro Chemical is 1.78 times less risky than Hangzhou EZVIZ. It trades about 0.01 of its potential returns per unit of risk. Hangzhou EZVIZ Network is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 2,911 in Hangzhou EZVIZ Network on November 7, 2024 and sell it today you would earn a total of 824.00 from holding Hangzhou EZVIZ Network or generate 28.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yueyang Xingchang Petro Chemic vs. Hangzhou EZVIZ Network
Performance |
| Timeline |
| Yueyang Xingchang Petro |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hangzhou EZVIZ Network |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Yueyang Xingchang and Hangzhou EZVIZ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yueyang Xingchang and Hangzhou EZVIZ
The main advantage of trading using opposite Yueyang Xingchang and Hangzhou EZVIZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yueyang Xingchang position performs unexpectedly, Hangzhou EZVIZ 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 Hangzhou EZVIZ will offset losses from the drop in Hangzhou EZVIZ's long position.The idea behind Yueyang Xingchang Petro Chemical and Hangzhou EZVIZ Network 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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