Correlation Between Zotye Automobile and Sichuan Teway
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By analyzing existing cross correlation between Zotye Automobile Co and Sichuan Teway Food, you can compare the effects of market volatilities on Zotye Automobile and Sichuan Teway 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 Sichuan Teway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zotye Automobile and Sichuan Teway.
Diversification Opportunities for Zotye Automobile and Sichuan Teway
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Zotye and Sichuan is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Zotye Automobile Co and Sichuan Teway Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Teway Food 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 Sichuan Teway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Teway Food has no effect on the direction of Zotye Automobile i.e., Zotye Automobile and Sichuan Teway go up and down completely randomly.
Pair Corralation between Zotye Automobile and Sichuan Teway
Assuming the 90 days trading horizon Zotye Automobile Co is expected to generate 1.85 times more return on investment than Sichuan Teway. However, Zotye Automobile is 1.85 times more volatile than Sichuan Teway Food. It trades about 0.07 of its potential returns per unit of risk. Sichuan Teway Food is currently generating about -0.03 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 | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zotye Automobile Co vs. Sichuan Teway Food
Performance |
| Timeline |
| Zotye Automobile |
| Sichuan Teway Food |
Zotye Automobile and Sichuan Teway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zotye Automobile and Sichuan Teway
The main advantage of trading using opposite Zotye Automobile and Sichuan Teway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zotye Automobile position performs unexpectedly, Sichuan Teway 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 Sichuan Teway will offset losses from the drop in Sichuan Teway'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 |
| Sichuan Teway vs. Nanjing Putian Telecommunications | Sichuan Teway vs. Shenzhen Hifuture Electric | Sichuan Teway vs. Tianjin Realty Development | Sichuan Teway vs. Shenyang Huitian Thermal |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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