Correlation Between China Longyuan and Zoy Home
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By analyzing existing cross correlation between China Longyuan Power and Zoy Home Furnishing, you can compare the effects of market volatilities on China Longyuan and Zoy Home 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 China Longyuan with a short position of Zoy Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Longyuan and Zoy Home.
Diversification Opportunities for China Longyuan and Zoy Home
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Zoy is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding China Longyuan Power and Zoy Home Furnishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoy Home Furnishing and China Longyuan 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 China Longyuan Power are associated (or correlated) with Zoy Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoy Home Furnishing has no effect on the direction of China Longyuan i.e., China Longyuan and Zoy Home go up and down completely randomly.
Pair Corralation between China Longyuan and Zoy Home
Assuming the 90 days trading horizon China Longyuan Power is expected to generate 0.49 times more return on investment than Zoy Home. However, China Longyuan Power is 2.03 times less risky than Zoy Home. It trades about -0.01 of its potential returns per unit of risk. Zoy Home Furnishing is currently generating about -0.02 per unit of risk. If you would invest 1,861 in China Longyuan Power on September 14, 2024 and sell it today you would lose (150.00) from holding China Longyuan Power or give up 8.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Longyuan Power vs. Zoy Home Furnishing
Performance |
| Timeline |
| China Longyuan Power |
| Zoy Home Furnishing |
China Longyuan and Zoy Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Longyuan and Zoy Home
The main advantage of trading using opposite China Longyuan and Zoy Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Longyuan position performs unexpectedly, Zoy Home 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 Zoy Home will offset losses from the drop in Zoy Home's long position.| China Longyuan vs. Zhejiang Construction Investment | China Longyuan vs. Zhuhai Comleader Information | China Longyuan vs. Westone Information Industry | China Longyuan vs. Jiugui Liquor Co |
| Zoy Home vs. Lutian Machinery Co | Zoy Home vs. China Longyuan Power | Zoy Home vs. PetroChina Co Ltd | Zoy Home vs. Bank of China |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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