Correlation Between Zhejiang Qianjiang and Chengdu Kanghua
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By analyzing existing cross correlation between Zhejiang Qianjiang Motorcycle and Chengdu Kanghua Biological, you can compare the effects of market volatilities on Zhejiang Qianjiang and Chengdu Kanghua 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 Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Qianjiang and Chengdu Kanghua.
Diversification Opportunities for Zhejiang Qianjiang and Chengdu Kanghua
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Chengdu is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Qianjiang Motorcycle and Chengdu Kanghua Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Kanghua Biol 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 Chengdu Kanghua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Kanghua Biol has no effect on the direction of Zhejiang Qianjiang i.e., Zhejiang Qianjiang and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between Zhejiang Qianjiang and Chengdu Kanghua
Assuming the 90 days trading horizon Zhejiang Qianjiang Motorcycle is expected to generate 0.96 times more return on investment than Chengdu Kanghua. However, Zhejiang Qianjiang Motorcycle is 1.04 times less risky than Chengdu Kanghua. It trades about 0.01 of its potential returns per unit of risk. Chengdu Kanghua Biological is currently generating about -0.02 per unit of risk. If you would invest 1,819 in Zhejiang Qianjiang Motorcycle on August 29, 2024 and sell it today you would lose (171.00) from holding Zhejiang Qianjiang Motorcycle or give up 9.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Qianjiang Motorcycle vs. Chengdu Kanghua Biological
Performance |
| Timeline |
| Zhejiang Qianjiang |
| Chengdu Kanghua Biol |
Zhejiang Qianjiang and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Qianjiang and Chengdu Kanghua
The main advantage of trading using opposite Zhejiang Qianjiang and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Qianjiang position performs unexpectedly, Chengdu Kanghua 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 Chengdu Kanghua will offset losses from the drop in Chengdu Kanghua's long position.| Zhejiang Qianjiang vs. Changchun UP Optotech | Zhejiang Qianjiang vs. Dymatic Chemicals | Zhejiang Qianjiang vs. Kuangda Technology Group | Zhejiang Qianjiang vs. Shandong Polymer Biochemicals |
| Chengdu Kanghua vs. Industrial and Commercial | Chengdu Kanghua vs. China Construction Bank | Chengdu Kanghua vs. Agricultural Bank of | Chengdu Kanghua vs. Bank of China |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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