Correlation Between Zhejiang Qianjiang and Zhengzhou Qianweiyangchu
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By analyzing existing cross correlation between Zhejiang Qianjiang Motorcycle and Zhengzhou Qianweiyangchu Food, you can compare the effects of market volatilities on Zhejiang Qianjiang and Zhengzhou Qianweiyangchu 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 Zhejiang Qianjiang with a short position of Zhengzhou Qianweiyangchu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Qianjiang and Zhengzhou Qianweiyangchu.
Diversification Opportunities for Zhejiang Qianjiang and Zhengzhou Qianweiyangchu
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and Zhengzhou is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Qianjiang Motorcycle and Zhengzhou Qianweiyangchu Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhengzhou Qianweiyangchu and Zhejiang Qianjiang 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 Zhejiang Qianjiang Motorcycle are associated (or correlated) with Zhengzhou Qianweiyangchu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhengzhou Qianweiyangchu has no effect on the direction of Zhejiang Qianjiang i.e., Zhejiang Qianjiang and Zhengzhou Qianweiyangchu go up and down completely randomly.
Pair Corralation between Zhejiang Qianjiang and Zhengzhou Qianweiyangchu
Assuming the 90 days trading horizon Zhejiang Qianjiang Motorcycle is expected to under-perform the Zhengzhou Qianweiyangchu. But the stock apears to be less risky and, when comparing its historical volatility, Zhejiang Qianjiang Motorcycle is 1.72 times less risky than Zhengzhou Qianweiyangchu. The stock trades about -0.07 of its potential returns per unit of risk. The Zhengzhou Qianweiyangchu Food is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 3,030 in Zhengzhou Qianweiyangchu Food on August 30, 2024 and sell it today you would earn a total of 547.00 from holding Zhengzhou Qianweiyangchu Food or generate 18.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Qianjiang Motorcycle vs. Zhengzhou Qianweiyangchu Food
Performance |
| Timeline |
| Zhejiang Qianjiang |
| Zhengzhou Qianweiyangchu |
Zhejiang Qianjiang and Zhengzhou Qianweiyangchu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Qianjiang and Zhengzhou Qianweiyangchu
The main advantage of trading using opposite Zhejiang Qianjiang and Zhengzhou Qianweiyangchu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Qianjiang position performs unexpectedly, Zhengzhou Qianweiyangchu 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 Zhengzhou Qianweiyangchu will offset losses from the drop in Zhengzhou Qianweiyangchu's long position.| Zhejiang Qianjiang vs. Glodon Software Co | Zhejiang Qianjiang vs. Jiangyin Jianghua Microelectronics | Zhejiang Qianjiang vs. Success Electronics | Zhejiang Qianjiang vs. Servyou Software Group |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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