Correlation Between Zhejiang Qianjiang and Zhejiang JIULI
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By analyzing existing cross correlation between Zhejiang Qianjiang Motorcycle and Zhejiang JIULI Hi tech, you can compare the effects of market volatilities on Zhejiang Qianjiang and Zhejiang JIULI 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 Zhejiang JIULI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Qianjiang and Zhejiang JIULI.
Diversification Opportunities for Zhejiang Qianjiang and Zhejiang JIULI
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zhejiang and Zhejiang is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Qianjiang Motorcycle and Zhejiang JIULI Hi tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang JIULI Hi 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 Zhejiang JIULI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang JIULI Hi has no effect on the direction of Zhejiang Qianjiang i.e., Zhejiang Qianjiang and Zhejiang JIULI go up and down completely randomly.
Pair Corralation between Zhejiang Qianjiang and Zhejiang JIULI
Assuming the 90 days trading horizon Zhejiang Qianjiang Motorcycle is expected to generate 3.77 times more return on investment than Zhejiang JIULI. However, Zhejiang Qianjiang is 3.77 times more volatile than Zhejiang JIULI Hi tech. It trades about 0.19 of its potential returns per unit of risk. Zhejiang JIULI Hi tech is currently generating about 0.54 per unit of risk. If you would invest 1,798 in Zhejiang Qianjiang Motorcycle on November 7, 2024 and sell it today you would earn a total of 194.00 from holding Zhejiang Qianjiang Motorcycle or generate 10.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Qianjiang Motorcycle vs. Zhejiang JIULI Hi tech
Performance |
| Timeline |
| Zhejiang Qianjiang |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Zhejiang JIULI Hi |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Zhejiang Qianjiang and Zhejiang JIULI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Qianjiang and Zhejiang JIULI
The main advantage of trading using opposite Zhejiang Qianjiang and Zhejiang JIULI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Qianjiang position performs unexpectedly, Zhejiang JIULI 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 JIULI will offset losses from the drop in Zhejiang JIULI's long position.The idea behind Zhejiang Qianjiang Motorcycle and Zhejiang JIULI Hi tech 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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