Correlation Between Zotye Automobile and China Longyuan
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By analyzing existing cross correlation between Zotye Automobile Co and China Longyuan Power, you can compare the effects of market volatilities on Zotye Automobile and China Longyuan 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 China Longyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zotye Automobile and China Longyuan.
Diversification Opportunities for Zotye Automobile and China Longyuan
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zotye and China is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Zotye Automobile Co and China Longyuan Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Longyuan Power 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 China Longyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Longyuan Power has no effect on the direction of Zotye Automobile i.e., Zotye Automobile and China Longyuan go up and down completely randomly.
Pair Corralation between Zotye Automobile and China Longyuan
Assuming the 90 days trading horizon Zotye Automobile Co is expected to under-perform the China Longyuan. In addition to that, Zotye Automobile is 3.01 times more volatile than China Longyuan Power. It trades about -0.07 of its total potential returns per unit of risk. China Longyuan Power is currently generating about 0.04 per unit of volatility. If you would invest 1,489 in China Longyuan Power on November 6, 2024 and sell it today you would earn a total of 11.00 from holding China Longyuan Power or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zotye Automobile Co vs. China Longyuan Power
Performance |
| Timeline |
| Zotye Automobile |
| China Longyuan Power |
Zotye Automobile and China Longyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zotye Automobile and China Longyuan
The main advantage of trading using opposite Zotye Automobile and China Longyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zotye Automobile position performs unexpectedly, China Longyuan 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 China Longyuan will offset losses from the drop in China Longyuan's long position.| Zotye Automobile vs. Universal Scientific Industrial | Zotye Automobile vs. Zhongshan Public Utilities | Zotye Automobile vs. Chengtun Mining Group | Zotye Automobile vs. Sichuan Yahua Industrial |
| China Longyuan vs. Hua Hong Semiconductor | China Longyuan vs. Shanghai V Test Semiconductor | China Longyuan vs. Ping An Insurance | China Longyuan vs. Thinkon Semiconductor Jinzhou |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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