Correlation Between Zhejiang Qianjiang and Guangxi Wuzhou
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By analyzing existing cross correlation between Zhejiang Qianjiang Motorcycle and Guangxi Wuzhou Communications, you can compare the effects of market volatilities on Zhejiang Qianjiang and Guangxi Wuzhou 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 Guangxi Wuzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Qianjiang and Guangxi Wuzhou.
Diversification Opportunities for Zhejiang Qianjiang and Guangxi Wuzhou
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Zhejiang and Guangxi is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Qianjiang Motorcycle and Guangxi Wuzhou Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangxi Wuzhou Commu 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 Guangxi Wuzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangxi Wuzhou Commu has no effect on the direction of Zhejiang Qianjiang i.e., Zhejiang Qianjiang and Guangxi Wuzhou go up and down completely randomly.
Pair Corralation between Zhejiang Qianjiang and Guangxi Wuzhou
Assuming the 90 days trading horizon Zhejiang Qianjiang Motorcycle is expected to under-perform the Guangxi Wuzhou. In addition to that, Zhejiang Qianjiang is 1.26 times more volatile than Guangxi Wuzhou Communications. It trades about -0.01 of its total potential returns per unit of risk. Guangxi Wuzhou Communications is currently generating about 0.04 per unit of volatility. If you would invest 342.00 in Guangxi Wuzhou Communications on October 13, 2024 and sell it today you would earn a total of 115.00 from holding Guangxi Wuzhou Communications or generate 33.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Qianjiang Motorcycle vs. Guangxi Wuzhou Communications
Performance |
| Timeline |
| Zhejiang Qianjiang |
| Guangxi Wuzhou Commu |
Zhejiang Qianjiang and Guangxi Wuzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Qianjiang and Guangxi Wuzhou
The main advantage of trading using opposite Zhejiang Qianjiang and Guangxi Wuzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Qianjiang position performs unexpectedly, Guangxi Wuzhou 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 Guangxi Wuzhou will offset losses from the drop in Guangxi Wuzhou's long position.| Zhejiang Qianjiang vs. PetroChina Co Ltd | Zhejiang Qianjiang vs. China Mobile Limited | Zhejiang Qianjiang vs. CNOOC Limited | Zhejiang Qianjiang vs. Ping An Insurance |
| Guangxi Wuzhou vs. Guangzhou Automobile Group | Guangxi Wuzhou vs. Sinomach Automobile Co | Guangxi Wuzhou vs. Metro Investment Development | Guangxi Wuzhou vs. Zhejiang Qianjiang Motorcycle |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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