Correlation Between Zotye Automobile and China Zheshang
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By analyzing existing cross correlation between Zotye Automobile Co and China Zheshang Bank, you can compare the effects of market volatilities on Zotye Automobile and China Zheshang 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 Zheshang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zotye Automobile and China Zheshang.
Diversification Opportunities for Zotye Automobile and China Zheshang
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zotye and China is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Zotye Automobile Co and China Zheshang Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Zheshang Bank 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 Zheshang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Zheshang Bank has no effect on the direction of Zotye Automobile i.e., Zotye Automobile and China Zheshang go up and down completely randomly.
Pair Corralation between Zotye Automobile and China Zheshang
Assuming the 90 days trading horizon Zotye Automobile Co is expected to generate 4.21 times more return on investment than China Zheshang. However, Zotye Automobile is 4.21 times more volatile than China Zheshang Bank. It trades about 0.07 of its potential returns per unit of risk. China Zheshang Bank is currently generating about 0.08 per unit of risk. If you would invest 243.00 in Zotye Automobile Co on September 1, 2024 and sell it today you would earn a total of 12.00 from holding Zotye Automobile Co or generate 4.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Zotye Automobile Co vs. China Zheshang Bank
Performance |
| Timeline |
| Zotye Automobile |
| China Zheshang Bank |
Zotye Automobile and China Zheshang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zotye Automobile and China Zheshang
The main advantage of trading using opposite Zotye Automobile and China Zheshang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zotye Automobile position performs unexpectedly, China Zheshang 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 Zheshang will offset losses from the drop in China Zheshang's long position.| Zotye Automobile vs. Biwin Storage Technology | Zotye Automobile vs. PetroChina Co Ltd | Zotye Automobile vs. Industrial and Commercial | Zotye Automobile vs. China Construction Bank |
| China Zheshang vs. Cultural Investment Holdings | China Zheshang vs. Bus Online Co | China Zheshang vs. Holitech Technology Co | China Zheshang vs. Zotye Automobile Co |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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