Correlation Between Zhejiang Dahua and Strait Innovation
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By analyzing existing cross correlation between Zhejiang Dahua Technology and Strait Innovation Internet, you can compare the effects of market volatilities on Zhejiang Dahua and Strait Innovation 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 Strait Innovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Dahua and Strait Innovation.
Diversification Opportunities for Zhejiang Dahua and Strait Innovation
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Zhejiang and Strait is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Dahua Technology and Strait Innovation Internet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strait Innovation 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 Strait Innovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strait Innovation has no effect on the direction of Zhejiang Dahua i.e., Zhejiang Dahua and Strait Innovation go up and down completely randomly.
Pair Corralation between Zhejiang Dahua and Strait Innovation
Assuming the 90 days trading horizon Zhejiang Dahua Technology is expected to generate 0.52 times more return on investment than Strait Innovation. However, Zhejiang Dahua Technology is 1.94 times less risky than Strait Innovation. It trades about -0.32 of its potential returns per unit of risk. Strait Innovation Internet is currently generating about -0.38 per unit of risk. If you would invest 1,683 in Zhejiang Dahua Technology on October 9, 2024 and sell it today you would lose (197.00) from holding Zhejiang Dahua Technology or give up 11.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Dahua Technology vs. Strait Innovation Internet
Performance |
| Timeline |
| Zhejiang Dahua Technology |
| Strait Innovation |
Zhejiang Dahua and Strait Innovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Dahua and Strait Innovation
The main advantage of trading using opposite Zhejiang Dahua and Strait Innovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Dahua position performs unexpectedly, Strait Innovation 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 Strait Innovation will offset losses from the drop in Strait Innovation's long position.| Zhejiang Dahua vs. Northking Information Technology | Zhejiang Dahua vs. Bangyan Technology Co | Zhejiang Dahua vs. Dosilicon Co | Zhejiang Dahua vs. Liuzhou Chemical Industry |
| Strait Innovation vs. Industrial and Commercial | Strait Innovation vs. Agricultural Bank of | Strait Innovation vs. China Construction Bank | Strait Innovation vs. Bank of China |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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