Correlation Between Fujian Newland and Zhejiang Construction
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By analyzing existing cross correlation between Fujian Newland Computer and Zhejiang Construction Investment, you can compare the effects of market volatilities on Fujian Newland and Zhejiang Construction 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 Fujian Newland with a short position of Zhejiang Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Newland and Zhejiang Construction.
Diversification Opportunities for Fujian Newland and Zhejiang Construction
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fujian and Zhejiang is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Newland Computer and Zhejiang Construction Investme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Construction and Fujian Newland 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 Fujian Newland Computer are associated (or correlated) with Zhejiang Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Construction has no effect on the direction of Fujian Newland i.e., Fujian Newland and Zhejiang Construction go up and down completely randomly.
Pair Corralation between Fujian Newland and Zhejiang Construction
Assuming the 90 days trading horizon Fujian Newland Computer is expected to generate 1.1 times more return on investment than Zhejiang Construction. However, Fujian Newland is 1.1 times more volatile than Zhejiang Construction Investment. It trades about -0.06 of its potential returns per unit of risk. Zhejiang Construction Investment is currently generating about -0.22 per unit of risk. If you would invest 2,137 in Fujian Newland Computer on October 30, 2024 and sell it today you would lose (147.00) from holding Fujian Newland Computer or give up 6.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Newland Computer vs. Zhejiang Construction Investme
Performance |
| Timeline |
| Fujian Newland Computer |
| Zhejiang Construction |
Fujian Newland and Zhejiang Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Newland and Zhejiang Construction
The main advantage of trading using opposite Fujian Newland and Zhejiang Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Newland position performs unexpectedly, Zhejiang Construction 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 Zhejiang Construction will offset losses from the drop in Zhejiang Construction's long position.| Fujian Newland vs. Shandong Rike Chemical | Fujian Newland vs. Guizhou Chanhen Chemical | Fujian Newland vs. Shanghai Yanpu Metal | Fujian Newland vs. Kingclean Electric 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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