Correlation Between Zhongshan Broad-Ocean and Hangzhou Weiguang
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By analyzing existing cross correlation between Zhongshan Broad Ocean Motor and Hangzhou Weiguang Electronic, you can compare the effects of market volatilities on Zhongshan Broad-Ocean and Hangzhou Weiguang 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 Zhongshan Broad-Ocean with a short position of Hangzhou Weiguang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongshan Broad-Ocean and Hangzhou Weiguang.
Diversification Opportunities for Zhongshan Broad-Ocean and Hangzhou Weiguang
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Zhongshan and Hangzhou is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Zhongshan Broad Ocean Motor and Hangzhou Weiguang Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Weiguang and Zhongshan Broad-Ocean 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 Zhongshan Broad Ocean Motor are associated (or correlated) with Hangzhou Weiguang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Weiguang has no effect on the direction of Zhongshan Broad-Ocean i.e., Zhongshan Broad-Ocean and Hangzhou Weiguang go up and down completely randomly.
Pair Corralation between Zhongshan Broad-Ocean and Hangzhou Weiguang
Assuming the 90 days trading horizon Zhongshan Broad Ocean Motor is expected to under-perform the Hangzhou Weiguang. But the stock apears to be less risky and, when comparing its historical volatility, Zhongshan Broad Ocean Motor is 1.94 times less risky than Hangzhou Weiguang. The stock trades about -0.11 of its potential returns per unit of risk. The Hangzhou Weiguang Electronic is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 2,092 in Hangzhou Weiguang Electronic on September 2, 2024 and sell it today you would earn a total of 344.00 from holding Hangzhou Weiguang Electronic or generate 16.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongshan Broad Ocean Motor vs. Hangzhou Weiguang Electronic
Performance |
| Timeline |
| Zhongshan Broad Ocean |
| Hangzhou Weiguang |
Zhongshan Broad-Ocean and Hangzhou Weiguang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongshan Broad-Ocean and Hangzhou Weiguang
The main advantage of trading using opposite Zhongshan Broad-Ocean and Hangzhou Weiguang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongshan Broad-Ocean position performs unexpectedly, Hangzhou Weiguang 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 Hangzhou Weiguang will offset losses from the drop in Hangzhou Weiguang's long position.| Zhongshan Broad-Ocean vs. Bosera ChiNext ETF | Zhongshan Broad-Ocean vs. Gansu Jiu Steel | Zhongshan Broad-Ocean vs. Shenzhen MTC Co | Zhongshan Broad-Ocean vs. Ming Yang Smart |
| Hangzhou Weiguang vs. Shaanxi Broadcast TV | Hangzhou Weiguang vs. Zhongshan Broad Ocean Motor | Hangzhou Weiguang vs. Shanghai Metersbonwe FashionAccessories | Hangzhou Weiguang vs. Yindu Kitchen Equipment |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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