Correlation Between Zhejiang Dahua and Shaanxi Energy
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By analyzing existing cross correlation between Zhejiang Dahua Technology and Shaanxi Energy Investment, you can compare the effects of market volatilities on Zhejiang Dahua and Shaanxi Energy 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 Shaanxi Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Dahua and Shaanxi Energy.
Diversification Opportunities for Zhejiang Dahua and Shaanxi Energy
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and Shaanxi is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Dahua Technology and Shaanxi Energy Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Energy Investment 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 Shaanxi Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Energy Investment has no effect on the direction of Zhejiang Dahua i.e., Zhejiang Dahua and Shaanxi Energy go up and down completely randomly.
Pair Corralation between Zhejiang Dahua and Shaanxi Energy
Assuming the 90 days trading horizon Zhejiang Dahua Technology is expected to generate 1.49 times more return on investment than Shaanxi Energy. However, Zhejiang Dahua is 1.49 times more volatile than Shaanxi Energy Investment. It trades about 0.05 of its potential returns per unit of risk. Shaanxi Energy Investment is currently generating about -0.03 per unit of risk. If you would invest 1,079 in Zhejiang Dahua Technology on September 3, 2024 and sell it today you would earn a total of 554.00 from holding Zhejiang Dahua Technology or generate 51.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 87.72% |
| Values | Daily Returns |
Zhejiang Dahua Technology vs. Shaanxi Energy Investment
Performance |
| Timeline |
| Zhejiang Dahua Technology |
| Shaanxi Energy Investment |
Zhejiang Dahua and Shaanxi Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Dahua and Shaanxi Energy
The main advantage of trading using opposite Zhejiang Dahua and Shaanxi Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Dahua position performs unexpectedly, Shaanxi Energy 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 Shaanxi Energy will offset losses from the drop in Shaanxi Energy'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 |
| Shaanxi Energy vs. Gansu Jiu Steel | Shaanxi Energy vs. Ming Yang Smart | Shaanxi Energy vs. Aba Chemicals Corp | Shaanxi Energy vs. Loctek Ergonomic Technology |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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