Correlation Between Zoje Resources and Xiamen Goldenhome
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By analyzing existing cross correlation between Zoje Resources Investment and Xiamen Goldenhome Co, you can compare the effects of market volatilities on Zoje Resources and Xiamen Goldenhome 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 Zoje Resources with a short position of Xiamen Goldenhome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoje Resources and Xiamen Goldenhome.
Diversification Opportunities for Zoje Resources and Xiamen Goldenhome
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zoje and Xiamen is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Zoje Resources Investment and Xiamen Goldenhome Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Goldenhome and Zoje Resources 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 Zoje Resources Investment are associated (or correlated) with Xiamen Goldenhome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Goldenhome has no effect on the direction of Zoje Resources i.e., Zoje Resources and Xiamen Goldenhome go up and down completely randomly.
Pair Corralation between Zoje Resources and Xiamen Goldenhome
Assuming the 90 days trading horizon Zoje Resources Investment is expected to under-perform the Xiamen Goldenhome. In addition to that, Zoje Resources is 1.52 times more volatile than Xiamen Goldenhome Co. It trades about -0.06 of its total potential returns per unit of risk. Xiamen Goldenhome Co is currently generating about -0.03 per unit of volatility. If you would invest 2,112 in Xiamen Goldenhome Co on November 7, 2024 and sell it today you would lose (118.00) from holding Xiamen Goldenhome Co or give up 5.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zoje Resources Investment vs. Xiamen Goldenhome Co
Performance |
| Timeline |
| Zoje Resources Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Xiamen Goldenhome |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Zoje Resources and Xiamen Goldenhome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zoje Resources and Xiamen Goldenhome
The main advantage of trading using opposite Zoje Resources and Xiamen Goldenhome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoje Resources position performs unexpectedly, Xiamen Goldenhome 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 Xiamen Goldenhome will offset losses from the drop in Xiamen Goldenhome's long position.The idea behind Zoje Resources Investment and Xiamen Goldenhome 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.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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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