Correlation Between Zotye Automobile and Zhejiang Dahua
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By analyzing existing cross correlation between Zotye Automobile Co and Zhejiang Dahua Technology, you can compare the effects of market volatilities on Zotye Automobile and Zhejiang Dahua 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 Zhejiang Dahua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zotye Automobile and Zhejiang Dahua.
Diversification Opportunities for Zotye Automobile and Zhejiang Dahua
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zotye and Zhejiang is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Zotye Automobile Co and Zhejiang Dahua Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Dahua Technology 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 Zhejiang Dahua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Dahua Technology has no effect on the direction of Zotye Automobile i.e., Zotye Automobile and Zhejiang Dahua go up and down completely randomly.
Pair Corralation between Zotye Automobile and Zhejiang Dahua
Assuming the 90 days trading horizon Zotye Automobile Co is expected to generate 1.61 times more return on investment than Zhejiang Dahua. However, Zotye Automobile is 1.61 times more volatile than Zhejiang Dahua Technology. It trades about -0.01 of its potential returns per unit of risk. Zhejiang Dahua Technology is currently generating about -0.02 per unit of risk. If you would invest 379.00 in Zotye Automobile Co on September 3, 2024 and sell it today you would lose (108.00) from holding Zotye Automobile Co or give up 28.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zotye Automobile Co vs. Zhejiang Dahua Technology
Performance |
| Timeline |
| Zotye Automobile |
| Zhejiang Dahua Technology |
Zotye Automobile and Zhejiang Dahua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zotye Automobile and Zhejiang Dahua
The main advantage of trading using opposite Zotye Automobile and Zhejiang Dahua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zotye Automobile position performs unexpectedly, Zhejiang Dahua 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 Zhejiang Dahua will offset losses from the drop in Zhejiang Dahua's long position.| Zotye Automobile vs. Xinjiang Baodi Mining | Zotye Automobile vs. Quectel Wireless Solutions | Zotye Automobile vs. Shanghai Metersbonwe FashionAccessories | Zotye Automobile vs. Pengxin International Mining |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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