Correlation Between Zhejiang Qianjiang and Lingyuan Iron
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By analyzing existing cross correlation between Zhejiang Qianjiang Motorcycle and Lingyuan Iron Steel, you can compare the effects of market volatilities on Zhejiang Qianjiang and Lingyuan Iron 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 Lingyuan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Qianjiang and Lingyuan Iron.
Diversification Opportunities for Zhejiang Qianjiang and Lingyuan Iron
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and Lingyuan is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Qianjiang Motorcycle and Lingyuan Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lingyuan Iron Steel 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 Lingyuan Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lingyuan Iron Steel has no effect on the direction of Zhejiang Qianjiang i.e., Zhejiang Qianjiang and Lingyuan Iron go up and down completely randomly.
Pair Corralation between Zhejiang Qianjiang and Lingyuan Iron
Assuming the 90 days trading horizon Zhejiang Qianjiang Motorcycle is expected to generate 1.37 times more return on investment than Lingyuan Iron. However, Zhejiang Qianjiang is 1.37 times more volatile than Lingyuan Iron Steel. It trades about 0.01 of its potential returns per unit of risk. Lingyuan Iron Steel is currently generating about 0.0 per unit of risk. If you would invest 1,873 in Zhejiang Qianjiang Motorcycle on September 2, 2024 and sell it today you would lose (224.00) from holding Zhejiang Qianjiang Motorcycle or give up 11.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Qianjiang Motorcycle vs. Lingyuan Iron Steel
Performance |
| Timeline |
| Zhejiang Qianjiang |
| Lingyuan Iron Steel |
Zhejiang Qianjiang and Lingyuan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Qianjiang and Lingyuan Iron
The main advantage of trading using opposite Zhejiang Qianjiang and Lingyuan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Qianjiang position performs unexpectedly, Lingyuan Iron 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 Lingyuan Iron will offset losses from the drop in Lingyuan Iron's long position.| Zhejiang Qianjiang vs. Guizhou BroadcastingTV Info | Zhejiang Qianjiang vs. Shuhua Sports Co | Zhejiang Qianjiang vs. Ciwen Media Co | Zhejiang Qianjiang vs. Shanghai Broadband Technology |
| Lingyuan Iron vs. Dongnan Electronics Co | Lingyuan Iron vs. Jiangyin Jianghua Microelectronics | Lingyuan Iron vs. Kunshan Guoli Electronic | Lingyuan Iron vs. Heren Health Co |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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