Correlation Between Zotye Automobile and WuXi Xinje
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By analyzing existing cross correlation between Zotye Automobile Co and WuXi Xinje Electric, you can compare the effects of market volatilities on Zotye Automobile and WuXi Xinje 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 WuXi Xinje. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zotye Automobile and WuXi Xinje.
Diversification Opportunities for Zotye Automobile and WuXi Xinje
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zotye and WuXi is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Zotye Automobile Co and WuXi Xinje Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi Xinje Electric 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 WuXi Xinje. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi Xinje Electric has no effect on the direction of Zotye Automobile i.e., Zotye Automobile and WuXi Xinje go up and down completely randomly.
Pair Corralation between Zotye Automobile and WuXi Xinje
Assuming the 90 days trading horizon Zotye Automobile Co is expected to generate 1.78 times more return on investment than WuXi Xinje. However, Zotye Automobile is 1.78 times more volatile than WuXi Xinje Electric. It trades about 0.12 of its potential returns per unit of risk. WuXi Xinje Electric is currently generating about 0.12 per unit of risk. If you would invest 142.00 in Zotye Automobile Co on September 27, 2024 and sell it today you would earn a total of 114.00 from holding Zotye Automobile Co or generate 80.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zotye Automobile Co vs. WuXi Xinje Electric
Performance |
| Timeline |
| Zotye Automobile |
| WuXi Xinje Electric |
Zotye Automobile and WuXi Xinje Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zotye Automobile and WuXi Xinje
The main advantage of trading using opposite Zotye Automobile and WuXi Xinje positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zotye Automobile position performs unexpectedly, WuXi Xinje 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 WuXi Xinje will offset losses from the drop in WuXi Xinje's long position.| Zotye Automobile vs. New China Life | Zotye Automobile vs. Ming Yang Smart | Zotye Automobile vs. 159681 | Zotye Automobile vs. 159005 |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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