Correlation Between Zotye Automobile and Tengda Construction
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By analyzing existing cross correlation between Zotye Automobile Co and Tengda Construction Group, you can compare the effects of market volatilities on Zotye Automobile and Tengda Construction 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 Tengda Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zotye Automobile and Tengda Construction.
Diversification Opportunities for Zotye Automobile and Tengda Construction
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Zotye and Tengda is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Zotye Automobile Co and Tengda Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tengda Construction 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 Tengda Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tengda Construction has no effect on the direction of Zotye Automobile i.e., Zotye Automobile and Tengda Construction go up and down completely randomly.
Pair Corralation between Zotye Automobile and Tengda Construction
Assuming the 90 days trading horizon Zotye Automobile Co is expected to generate 2.1 times more return on investment than Tengda Construction. However, Zotye Automobile is 2.1 times more volatile than Tengda Construction Group. It trades about 0.25 of its potential returns per unit of risk. Tengda Construction Group is currently generating about 0.25 per unit of risk. If you would invest 148.00 in Zotye Automobile Co on September 12, 2024 and sell it today you would earn a total of 141.00 from holding Zotye Automobile Co or generate 95.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zotye Automobile Co vs. Tengda Construction Group
Performance |
| Timeline |
| Zotye Automobile |
| Tengda Construction |
Zotye Automobile and Tengda Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zotye Automobile and Tengda Construction
The main advantage of trading using opposite Zotye Automobile and Tengda Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zotye Automobile position performs unexpectedly, Tengda Construction 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 Tengda Construction will offset losses from the drop in Tengda Construction's long position.| Zotye Automobile vs. Lutian Machinery Co | Zotye Automobile vs. PetroChina Co Ltd | Zotye Automobile vs. Bank of China | Zotye Automobile vs. Gansu Jiu Steel |
| Tengda Construction vs. Agricultural Bank of | Tengda Construction vs. Industrial and Commercial | Tengda Construction vs. Bank of China | Tengda Construction vs. PetroChina Co Ltd |
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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