Correlation Between Zhejiang Yinlun and Jiangxi Hengda
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By analyzing existing cross correlation between Zhejiang Yinlun Machinery and Jiangxi Hengda Hi Tech, you can compare the effects of market volatilities on Zhejiang Yinlun and Jiangxi Hengda 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 Zhejiang Yinlun with a short position of Jiangxi Hengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Yinlun and Jiangxi Hengda.
Diversification Opportunities for Zhejiang Yinlun and Jiangxi Hengda
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zhejiang and Jiangxi is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Yinlun Machinery and Jiangxi Hengda Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Hengda Hi and Zhejiang Yinlun 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 Zhejiang Yinlun Machinery are associated (or correlated) with Jiangxi Hengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Hengda Hi has no effect on the direction of Zhejiang Yinlun i.e., Zhejiang Yinlun and Jiangxi Hengda go up and down completely randomly.
Pair Corralation between Zhejiang Yinlun and Jiangxi Hengda
Assuming the 90 days trading horizon Zhejiang Yinlun Machinery is expected to generate 0.6 times more return on investment than Jiangxi Hengda. However, Zhejiang Yinlun Machinery is 1.66 times less risky than Jiangxi Hengda. It trades about 0.14 of its potential returns per unit of risk. Jiangxi Hengda Hi Tech is currently generating about -0.09 per unit of risk. If you would invest 1,788 in Zhejiang Yinlun Machinery on October 30, 2024 and sell it today you would earn a total of 228.00 from holding Zhejiang Yinlun Machinery or generate 12.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Yinlun Machinery vs. Jiangxi Hengda Hi Tech
Performance |
| Timeline |
| Zhejiang Yinlun Machinery |
| Jiangxi Hengda Hi |
Zhejiang Yinlun and Jiangxi Hengda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Yinlun and Jiangxi Hengda
The main advantage of trading using opposite Zhejiang Yinlun and Jiangxi Hengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Yinlun position performs unexpectedly, Jiangxi Hengda 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 Jiangxi Hengda will offset losses from the drop in Jiangxi Hengda's long position.| Zhejiang Yinlun vs. Dymatic Chemicals | Zhejiang Yinlun vs. Lianhe Chemical Technology | Zhejiang Yinlun vs. Daoming OpticsChemical Co | Zhejiang Yinlun vs. Queclink Wireless Solutions |
| Jiangxi Hengda vs. Zijin Mining Group | Jiangxi Hengda vs. Wanhua Chemical Group | Jiangxi Hengda vs. Baoshan Iron Steel | Jiangxi Hengda vs. Shandong Gold Mining |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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