Correlation Between Zhejiang Dahua and ADAMA
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By analyzing existing cross correlation between Zhejiang Dahua Technology and ADAMA, you can compare the effects of market volatilities on Zhejiang Dahua and ADAMA 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 Dahua with a short position of ADAMA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Dahua and ADAMA.
Diversification Opportunities for Zhejiang Dahua and ADAMA
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and ADAMA is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Dahua Technology and ADAMA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADAMA and Zhejiang Dahua 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 Dahua Technology are associated (or correlated) with ADAMA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADAMA has no effect on the direction of Zhejiang Dahua i.e., Zhejiang Dahua and ADAMA go up and down completely randomly.
Pair Corralation between Zhejiang Dahua and ADAMA
Assuming the 90 days trading horizon Zhejiang Dahua Technology is expected to generate 1.43 times more return on investment than ADAMA. However, Zhejiang Dahua is 1.43 times more volatile than ADAMA. It trades about 0.02 of its potential returns per unit of risk. ADAMA is currently generating about -0.05 per unit of risk. If you would invest 1,629 in Zhejiang Dahua Technology on September 3, 2024 and sell it today you would earn a total of 4.00 from holding Zhejiang Dahua Technology or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Dahua Technology vs. ADAMA
Performance |
| Timeline |
| Zhejiang Dahua Technology |
| ADAMA |
Zhejiang Dahua and ADAMA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Dahua and ADAMA
The main advantage of trading using opposite Zhejiang Dahua and ADAMA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Dahua position performs unexpectedly, ADAMA 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 ADAMA will offset losses from the drop in ADAMA's long position.| Zhejiang Dahua vs. State Grid InformationCommunication | Zhejiang Dahua vs. CICT Mobile Communication | Zhejiang Dahua vs. Shenzhen Kexin Communication | Zhejiang Dahua vs. Tongyu Communication |
| ADAMA vs. Quectel Wireless Solutions | ADAMA vs. Zhejiang Yayi Metal | ADAMA vs. Zhejiang Publishing Media | ADAMA vs. Ye Chiu Metal |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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