Correlation Between Zotye Automobile and Fujian Newland
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By analyzing existing cross correlation between Zotye Automobile Co and Fujian Newland Computer, you can compare the effects of market volatilities on Zotye Automobile and Fujian Newland 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 Fujian Newland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zotye Automobile and Fujian Newland.
Diversification Opportunities for Zotye Automobile and Fujian Newland
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zotye and Fujian is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Zotye Automobile Co and Fujian Newland Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Newland Computer 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 Fujian Newland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Newland Computer has no effect on the direction of Zotye Automobile i.e., Zotye Automobile and Fujian Newland go up and down completely randomly.
Pair Corralation between Zotye Automobile and Fujian Newland
Assuming the 90 days trading horizon Zotye Automobile Co is expected to generate 1.56 times more return on investment than Fujian Newland. However, Zotye Automobile is 1.56 times more volatile than Fujian Newland Computer. It trades about 0.02 of its potential returns per unit of risk. Fujian Newland Computer is currently generating about 0.03 per unit of risk. If you would invest 206.00 in Zotye Automobile Co on November 4, 2024 and sell it today you would lose (2.00) from holding Zotye Automobile Co or give up 0.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zotye Automobile Co vs. Fujian Newland Computer
Performance |
| Timeline |
| Zotye Automobile |
| Fujian Newland Computer |
Zotye Automobile and Fujian Newland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zotye Automobile and Fujian Newland
The main advantage of trading using opposite Zotye Automobile and Fujian Newland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zotye Automobile position performs unexpectedly, Fujian Newland 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 Fujian Newland will offset losses from the drop in Fujian Newland's long position.| Zotye Automobile vs. Wuxi Double Elephant | Zotye Automobile vs. CICT Mobile Communication | Zotye Automobile vs. Allwin Telecommunication Co | Zotye Automobile vs. Xinjiang Qingsong Building |
| Fujian Newland vs. Industrial and Commercial | Fujian Newland vs. China Construction Bank | Fujian Newland vs. Agricultural Bank of | Fujian Newland 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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