Correlation Between Zhejiang Qianjiang and Shanghai Lingyun
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By analyzing existing cross correlation between Zhejiang Qianjiang Motorcycle and Shanghai Lingyun Industries, you can compare the effects of market volatilities on Zhejiang Qianjiang and Shanghai Lingyun 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 Shanghai Lingyun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Qianjiang and Shanghai Lingyun.
Diversification Opportunities for Zhejiang Qianjiang and Shanghai Lingyun
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and Shanghai is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Qianjiang Motorcycle and Shanghai Lingyun Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Lingyun Ind 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 Shanghai Lingyun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Lingyun Ind has no effect on the direction of Zhejiang Qianjiang i.e., Zhejiang Qianjiang and Shanghai Lingyun go up and down completely randomly.
Pair Corralation between Zhejiang Qianjiang and Shanghai Lingyun
Assuming the 90 days trading horizon Zhejiang Qianjiang Motorcycle is expected to generate 0.82 times more return on investment than Shanghai Lingyun. However, Zhejiang Qianjiang Motorcycle is 1.22 times less risky than Shanghai Lingyun. It trades about 0.01 of its potential returns per unit of risk. Shanghai Lingyun Industries is currently generating about 0.0 per unit of risk. If you would invest 1,747 in Zhejiang Qianjiang Motorcycle on September 14, 2024 and sell it today you would lose (21.00) from holding Zhejiang Qianjiang Motorcycle or give up 1.2% 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. Shanghai Lingyun Industries
Performance |
| Timeline |
| Zhejiang Qianjiang |
| Shanghai Lingyun Ind |
Zhejiang Qianjiang and Shanghai Lingyun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Qianjiang and Shanghai Lingyun
The main advantage of trading using opposite Zhejiang Qianjiang and Shanghai Lingyun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Qianjiang position performs unexpectedly, Shanghai Lingyun 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 Shanghai Lingyun will offset losses from the drop in Shanghai Lingyun's long position.| Zhejiang Qianjiang vs. Lutian Machinery Co | Zhejiang Qianjiang vs. China Longyuan Power | Zhejiang Qianjiang vs. PetroChina Co Ltd | Zhejiang Qianjiang vs. Bank of China |
| Shanghai Lingyun vs. Zhejiang Qianjiang Motorcycle | Shanghai Lingyun vs. Dongfeng Automobile Co | Shanghai Lingyun vs. Ningbo Fangzheng Automobile | Shanghai Lingyun vs. Xiangyang Automobile Bearing |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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