Correlation Between Zhengzhou Qianweiyangchu and JuneYao Dairy
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By analyzing existing cross correlation between Zhengzhou Qianweiyangchu Food and JuneYao Dairy Co, you can compare the effects of market volatilities on Zhengzhou Qianweiyangchu and JuneYao Dairy 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 Zhengzhou Qianweiyangchu with a short position of JuneYao Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhengzhou Qianweiyangchu and JuneYao Dairy.
Diversification Opportunities for Zhengzhou Qianweiyangchu and JuneYao Dairy
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhengzhou and JuneYao is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Zhengzhou Qianweiyangchu Food and JuneYao Dairy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JuneYao Dairy and Zhengzhou Qianweiyangchu 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 Zhengzhou Qianweiyangchu Food are associated (or correlated) with JuneYao Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JuneYao Dairy has no effect on the direction of Zhengzhou Qianweiyangchu i.e., Zhengzhou Qianweiyangchu and JuneYao Dairy go up and down completely randomly.
Pair Corralation between Zhengzhou Qianweiyangchu and JuneYao Dairy
Assuming the 90 days trading horizon Zhengzhou Qianweiyangchu Food is expected to under-perform the JuneYao Dairy. But the stock apears to be less risky and, when comparing its historical volatility, Zhengzhou Qianweiyangchu Food is 1.16 times less risky than JuneYao Dairy. The stock trades about -0.04 of its potential returns per unit of risk. The JuneYao Dairy Co is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 789.00 in JuneYao Dairy Co on October 14, 2024 and sell it today you would lose (217.00) from holding JuneYao Dairy Co or give up 27.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhengzhou Qianweiyangchu Food vs. JuneYao Dairy Co
Performance |
| Timeline |
| Zhengzhou Qianweiyangchu |
| JuneYao Dairy |
Zhengzhou Qianweiyangchu and JuneYao Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhengzhou Qianweiyangchu and JuneYao Dairy
The main advantage of trading using opposite Zhengzhou Qianweiyangchu and JuneYao Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhengzhou Qianweiyangchu position performs unexpectedly, JuneYao Dairy 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 JuneYao Dairy will offset losses from the drop in JuneYao Dairy's long position.The idea behind Zhengzhou Qianweiyangchu Food and JuneYao Dairy Co 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.
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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