Correlation Between Zotye Automobile and Huagong Tech
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By analyzing existing cross correlation between Zotye Automobile Co and Huagong Tech Co, you can compare the effects of market volatilities on Zotye Automobile and Huagong Tech 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 Zotye Automobile with a short position of Huagong Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zotye Automobile and Huagong Tech.
Diversification Opportunities for Zotye Automobile and Huagong Tech
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zotye and Huagong is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Zotye Automobile Co and Huagong Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huagong Tech and Zotye Automobile 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 Zotye Automobile Co are associated (or correlated) with Huagong Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huagong Tech has no effect on the direction of Zotye Automobile i.e., Zotye Automobile and Huagong Tech go up and down completely randomly.
Pair Corralation between Zotye Automobile and Huagong Tech
Assuming the 90 days trading horizon Zotye Automobile is expected to generate 2.83 times less return on investment than Huagong Tech. In addition to that, Zotye Automobile is 2.43 times more volatile than Huagong Tech Co. It trades about 0.04 of its total potential returns per unit of risk. Huagong Tech Co is currently generating about 0.28 per unit of volatility. If you would invest 3,510 in Huagong Tech Co on September 27, 2024 and sell it today you would earn a total of 493.00 from holding Huagong Tech Co or generate 14.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Zotye Automobile Co vs. Huagong Tech Co
Performance |
| Timeline |
| Zotye Automobile |
| Huagong Tech |
Zotye Automobile and Huagong Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zotye Automobile and Huagong Tech
The main advantage of trading using opposite Zotye Automobile and Huagong Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zotye Automobile position performs unexpectedly, Huagong Tech 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 Huagong Tech will offset losses from the drop in Huagong Tech's long position.| Zotye Automobile vs. New China Life | Zotye Automobile vs. Ming Yang Smart | Zotye Automobile vs. 159681 | Zotye Automobile vs. 159005 |
| Huagong Tech vs. Industrial and Commercial | Huagong Tech vs. China Construction Bank | Huagong Tech vs. Agricultural Bank of | Huagong Tech 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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