Correlation Between Zhejiang Dahua and Qinghaihuading Industrial
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By analyzing existing cross correlation between Zhejiang Dahua Technology and Qinghaihuading Industrial Co, you can compare the effects of market volatilities on Zhejiang Dahua and Qinghaihuading Industrial 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 Qinghaihuading Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Dahua and Qinghaihuading Industrial.
Diversification Opportunities for Zhejiang Dahua and Qinghaihuading Industrial
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Qinghaihuading is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Dahua Technology and Qinghaihuading Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qinghaihuading Industrial 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 Qinghaihuading Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qinghaihuading Industrial has no effect on the direction of Zhejiang Dahua i.e., Zhejiang Dahua and Qinghaihuading Industrial go up and down completely randomly.
Pair Corralation between Zhejiang Dahua and Qinghaihuading Industrial
Assuming the 90 days trading horizon Zhejiang Dahua Technology is expected to generate 0.93 times more return on investment than Qinghaihuading Industrial. However, Zhejiang Dahua Technology is 1.08 times less risky than Qinghaihuading Industrial. It trades about 0.04 of its potential returns per unit of risk. Qinghaihuading Industrial Co is currently generating about 0.01 per unit of risk. If you would invest 1,158 in Zhejiang Dahua Technology on September 3, 2024 and sell it today you would earn a total of 475.00 from holding Zhejiang Dahua Technology or generate 41.02% 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. Qinghaihuading Industrial Co
Performance |
| Timeline |
| Zhejiang Dahua Technology |
| Qinghaihuading Industrial |
Zhejiang Dahua and Qinghaihuading Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Dahua and Qinghaihuading Industrial
The main advantage of trading using opposite Zhejiang Dahua and Qinghaihuading Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Dahua position performs unexpectedly, Qinghaihuading Industrial 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 Qinghaihuading Industrial will offset losses from the drop in Qinghaihuading Industrial'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 |
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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