Correlation Between Zotye Automobile and Shanghai Bailian
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By analyzing existing cross correlation between Zotye Automobile Co and Shanghai Bailian Group, you can compare the effects of market volatilities on Zotye Automobile and Shanghai Bailian 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 Shanghai Bailian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zotye Automobile and Shanghai Bailian.
Diversification Opportunities for Zotye Automobile and Shanghai Bailian
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Zotye and Shanghai is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Zotye Automobile Co and Shanghai Bailian Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Bailian 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 Shanghai Bailian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Bailian has no effect on the direction of Zotye Automobile i.e., Zotye Automobile and Shanghai Bailian go up and down completely randomly.
Pair Corralation between Zotye Automobile and Shanghai Bailian
Assuming the 90 days trading horizon Zotye Automobile Co is expected to generate 1.96 times more return on investment than Shanghai Bailian. However, Zotye Automobile is 1.96 times more volatile than Shanghai Bailian Group. It trades about 0.11 of its potential returns per unit of risk. Shanghai Bailian Group is currently generating about 0.16 per unit of risk. If you would invest 248.00 in Zotye Automobile Co on September 4, 2024 and sell it today you would earn a total of 23.00 from holding Zotye Automobile Co or generate 9.27% 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. Shanghai Bailian Group
Performance |
| Timeline |
| Zotye Automobile |
| Shanghai Bailian |
Zotye Automobile and Shanghai Bailian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zotye Automobile and Shanghai Bailian
The main advantage of trading using opposite Zotye Automobile and Shanghai Bailian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zotye Automobile position performs unexpectedly, Shanghai Bailian 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 Shanghai Bailian will offset losses from the drop in Shanghai Bailian's long position.| Zotye Automobile vs. Industrial and Commercial | Zotye Automobile vs. China Construction Bank | Zotye Automobile vs. Agricultural Bank of | Zotye Automobile vs. Bank of China |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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