Correlation Between Zotye Automobile and Namchow Food
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By analyzing existing cross correlation between Zotye Automobile Co and Namchow Food Group, you can compare the effects of market volatilities on Zotye Automobile and Namchow Food 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 Namchow Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zotye Automobile and Namchow Food.
Diversification Opportunities for Zotye Automobile and Namchow Food
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zotye and Namchow is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Zotye Automobile Co and Namchow Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namchow Food Group 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 Namchow Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namchow Food Group has no effect on the direction of Zotye Automobile i.e., Zotye Automobile and Namchow Food go up and down completely randomly.
Pair Corralation between Zotye Automobile and Namchow Food
Assuming the 90 days trading horizon Zotye Automobile Co is expected to under-perform the Namchow Food. In addition to that, Zotye Automobile is 1.03 times more volatile than Namchow Food Group. It trades about -0.05 of its total potential returns per unit of risk. Namchow Food Group is currently generating about 0.09 per unit of volatility. If you would invest 1,618 in Namchow Food Group on November 9, 2024 and sell it today you would earn a total of 63.00 from holding Namchow Food Group or generate 3.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zotye Automobile Co vs. Namchow Food Group
Performance |
| Timeline |
| Zotye Automobile |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Namchow Food Group |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Zotye Automobile and Namchow Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zotye Automobile and Namchow Food
The main advantage of trading using opposite Zotye Automobile and Namchow Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zotye Automobile position performs unexpectedly, Namchow Food 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 Namchow Food will offset losses from the drop in Namchow Food's long position.The idea behind Zotye Automobile Co and Namchow Food Group 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.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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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