Correlation Between Zotye Automobile and Inner Mongolia
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By analyzing existing cross correlation between Zotye Automobile Co and Inner Mongolia BaoTou, you can compare the effects of market volatilities on Zotye Automobile and Inner Mongolia 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 Inner Mongolia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zotye Automobile and Inner Mongolia.
Diversification Opportunities for Zotye Automobile and Inner Mongolia
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zotye and Inner is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Zotye Automobile Co and Inner Mongolia BaoTou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inner Mongolia BaoTou 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 Inner Mongolia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inner Mongolia BaoTou has no effect on the direction of Zotye Automobile i.e., Zotye Automobile and Inner Mongolia go up and down completely randomly.
Pair Corralation between Zotye Automobile and Inner Mongolia
Assuming the 90 days trading horizon Zotye Automobile Co is expected to under-perform the Inner Mongolia. In addition to that, Zotye Automobile is 2.28 times more volatile than Inner Mongolia BaoTou. It trades about -0.01 of its total potential returns per unit of risk. Inner Mongolia BaoTou is currently generating about 0.0 per unit of volatility. If you would invest 187.00 in Inner Mongolia BaoTou on October 29, 2024 and sell it today you would lose (7.00) from holding Inner Mongolia BaoTou or give up 3.74% 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. Inner Mongolia BaoTou
Performance |
| Timeline |
| Zotye Automobile |
| Inner Mongolia BaoTou |
Zotye Automobile and Inner Mongolia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zotye Automobile and Inner Mongolia
The main advantage of trading using opposite Zotye Automobile and Inner Mongolia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zotye Automobile position performs unexpectedly, Inner Mongolia 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 Inner Mongolia will offset losses from the drop in Inner Mongolia's long position.The idea behind Zotye Automobile Co and Inner Mongolia BaoTou pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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