Correlation Between Zhejiang Dahua and Guangdong Wens
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By analyzing existing cross correlation between Zhejiang Dahua Technology and Guangdong Wens Foodstuff, you can compare the effects of market volatilities on Zhejiang Dahua and Guangdong Wens 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 Guangdong Wens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Dahua and Guangdong Wens.
Diversification Opportunities for Zhejiang Dahua and Guangdong Wens
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Guangdong is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Dahua Technology and Guangdong Wens Foodstuff in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Wens Foodstuff 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 Guangdong Wens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Wens Foodstuff has no effect on the direction of Zhejiang Dahua i.e., Zhejiang Dahua and Guangdong Wens go up and down completely randomly.
Pair Corralation between Zhejiang Dahua and Guangdong Wens
Assuming the 90 days trading horizon Zhejiang Dahua Technology is expected to generate 1.56 times more return on investment than Guangdong Wens. However, Zhejiang Dahua is 1.56 times more volatile than Guangdong Wens Foodstuff. It trades about -0.1 of its potential returns per unit of risk. Guangdong Wens Foodstuff is currently generating about -0.24 per unit of risk. If you would invest 1,783 in Zhejiang Dahua Technology on September 13, 2024 and sell it today you would lose (89.00) from holding Zhejiang Dahua Technology or give up 4.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Dahua Technology vs. Guangdong Wens Foodstuff
Performance |
| Timeline |
| Zhejiang Dahua Technology |
| Guangdong Wens Foodstuff |
Zhejiang Dahua and Guangdong Wens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Dahua and Guangdong Wens
The main advantage of trading using opposite Zhejiang Dahua and Guangdong Wens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Dahua position performs unexpectedly, Guangdong Wens 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 Guangdong Wens will offset losses from the drop in Guangdong Wens' long position.| Zhejiang Dahua vs. Miracll Chemicals Co | Zhejiang Dahua vs. Cofco Biochemical Anhui | Zhejiang Dahua vs. Shenzhen Noposion Agrochemicals | Zhejiang Dahua vs. Hubei Dinglong Chemical |
| Guangdong Wens vs. Nanjing Putian Telecommunications | Guangdong Wens vs. Tianjin Realty Development | Guangdong Wens vs. Kangyue Technology Co | Guangdong Wens vs. Shenzhen Hifuture Electric |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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