Correlation Between Zoje Resources and Suzhou Xingye
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By analyzing existing cross correlation between Zoje Resources Investment and Suzhou Xingye Material, you can compare the effects of market volatilities on Zoje Resources and Suzhou Xingye 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 Suzhou Xingye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoje Resources and Suzhou Xingye.
Diversification Opportunities for Zoje Resources and Suzhou Xingye
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Zoje and Suzhou is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Zoje Resources Investment and Suzhou Xingye Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou Xingye Material 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 Suzhou Xingye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou Xingye Material has no effect on the direction of Zoje Resources i.e., Zoje Resources and Suzhou Xingye go up and down completely randomly.
Pair Corralation between Zoje Resources and Suzhou Xingye
Assuming the 90 days trading horizon Zoje Resources is expected to generate 18.87 times less return on investment than Suzhou Xingye. But when comparing it to its historical volatility, Zoje Resources Investment is 5.99 times less risky than Suzhou Xingye. It trades about 0.07 of its potential returns per unit of risk. Suzhou Xingye Material is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 805.00 in Suzhou Xingye Material on November 9, 2024 and sell it today you would earn a total of 304.00 from holding Suzhou Xingye Material or generate 37.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 2.11% |
| Values | Daily Returns |
Zoje Resources Investment vs. Suzhou Xingye Material
Performance |
| Timeline |
| Zoje Resources Investment |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Suzhou Xingye Material |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Zoje Resources and Suzhou Xingye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zoje Resources and Suzhou Xingye
The main advantage of trading using opposite Zoje Resources and Suzhou Xingye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoje Resources position performs unexpectedly, Suzhou Xingye 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 Suzhou Xingye will offset losses from the drop in Suzhou Xingye's long position.The idea behind Zoje Resources Investment and Suzhou Xingye Material 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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