Correlation Between Zhejiang Dahua and State Grid
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By analyzing existing cross correlation between Zhejiang Dahua Technology and State Grid InformationCommunication, you can compare the effects of market volatilities on Zhejiang Dahua and State Grid 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 State Grid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Dahua and State Grid.
Diversification Opportunities for Zhejiang Dahua and State Grid
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and State is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Dahua Technology and State Grid InformationCommunic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Grid Informati 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 State Grid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Grid Informati has no effect on the direction of Zhejiang Dahua i.e., Zhejiang Dahua and State Grid go up and down completely randomly.
Pair Corralation between Zhejiang Dahua and State Grid
Assuming the 90 days trading horizon Zhejiang Dahua is expected to generate 4.56 times less return on investment than State Grid. But when comparing it to its historical volatility, Zhejiang Dahua Technology is 1.47 times less risky than State Grid. It trades about 0.03 of its potential returns per unit of risk. State Grid InformationCommunication is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,077 in State Grid InformationCommunication on September 4, 2024 and sell it today you would earn a total of 138.00 from holding State Grid InformationCommunication or generate 6.64% 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. State Grid InformationCommunic
Performance |
| Timeline |
| Zhejiang Dahua Technology |
| State Grid Informati |
Zhejiang Dahua and State Grid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Dahua and State Grid
The main advantage of trading using opposite Zhejiang Dahua and State Grid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Dahua position performs unexpectedly, State Grid 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 State Grid will offset losses from the drop in State Grid's long position.| Zhejiang Dahua vs. Ningbo Tech Bank Co | Zhejiang Dahua vs. Heilongjiang Transport Development | Zhejiang Dahua vs. Fujian Longzhou Transportation | Zhejiang Dahua vs. Guosheng Financial Holding |
| State Grid vs. Industrial and Commercial | State Grid vs. China Construction Bank | State Grid vs. Bank of China | State Grid vs. Agricultural Bank of |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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