Correlation Between Zhejiang Dahua and Jiangsu Zhongshe
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By analyzing existing cross correlation between Zhejiang Dahua Technology and Jiangsu Zhongshe Group, you can compare the effects of market volatilities on Zhejiang Dahua and Jiangsu Zhongshe 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 Jiangsu Zhongshe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Dahua and Jiangsu Zhongshe.
Diversification Opportunities for Zhejiang Dahua and Jiangsu Zhongshe
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and Jiangsu is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Dahua Technology and Jiangsu Zhongshe Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Zhongshe 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 Jiangsu Zhongshe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Zhongshe has no effect on the direction of Zhejiang Dahua i.e., Zhejiang Dahua and Jiangsu Zhongshe go up and down completely randomly.
Pair Corralation between Zhejiang Dahua and Jiangsu Zhongshe
Assuming the 90 days trading horizon Zhejiang Dahua Technology is expected to under-perform the Jiangsu Zhongshe. But the stock apears to be less risky and, when comparing its historical volatility, Zhejiang Dahua Technology is 1.37 times less risky than Jiangsu Zhongshe. The stock trades about -0.01 of its potential returns per unit of risk. The Jiangsu Zhongshe Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,208 in Jiangsu Zhongshe Group on January 25, 2025 and sell it today you would lose (198.00) from holding Jiangsu Zhongshe Group or give up 16.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Dahua Technology vs. Jiangsu Zhongshe Group
Performance |
| Timeline |
| Zhejiang Dahua Technology |
| Jiangsu Zhongshe |
Zhejiang Dahua and Jiangsu Zhongshe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Dahua and Jiangsu Zhongshe
The main advantage of trading using opposite Zhejiang Dahua and Jiangsu Zhongshe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Dahua position performs unexpectedly, Jiangsu Zhongshe 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 Jiangsu Zhongshe will offset losses from the drop in Jiangsu Zhongshe's long position.| Zhejiang Dahua vs. Meinian Onehealth Healthcare | Zhejiang Dahua vs. Jointo Energy Investment | Zhejiang Dahua vs. Andon Health Co | Zhejiang Dahua vs. Sanbo Hospital Management |
| Jiangsu Zhongshe vs. BTG Hotels Group | Jiangsu Zhongshe vs. Queclink Wireless Solutions | Jiangsu Zhongshe vs. Huizhou Speed Wireless | Jiangsu Zhongshe vs. China Minmetals Rare |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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