Correlation Between Zhongshan Broad-Ocean and Xiamen Goldenhome
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By analyzing existing cross correlation between Zhongshan Broad Ocean Motor and Xiamen Goldenhome Co, you can compare the effects of market volatilities on Zhongshan Broad-Ocean and Xiamen Goldenhome 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 Xiamen Goldenhome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongshan Broad-Ocean and Xiamen Goldenhome.
Diversification Opportunities for Zhongshan Broad-Ocean and Xiamen Goldenhome
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Zhongshan and Xiamen is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Zhongshan Broad Ocean Motor and Xiamen Goldenhome Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Goldenhome 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 Xiamen Goldenhome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Goldenhome has no effect on the direction of Zhongshan Broad-Ocean i.e., Zhongshan Broad-Ocean and Xiamen Goldenhome go up and down completely randomly.
Pair Corralation between Zhongshan Broad-Ocean and Xiamen Goldenhome
Assuming the 90 days trading horizon Zhongshan Broad Ocean Motor is expected to generate 1.73 times more return on investment than Xiamen Goldenhome. However, Zhongshan Broad-Ocean is 1.73 times more volatile than Xiamen Goldenhome Co. It trades about 0.14 of its potential returns per unit of risk. Xiamen Goldenhome Co is currently generating about 0.22 per unit of risk. If you would invest 540.00 in Zhongshan Broad Ocean Motor on November 7, 2024 and sell it today you would earn a total of 34.00 from holding Zhongshan Broad Ocean Motor or generate 6.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongshan Broad Ocean Motor vs. Xiamen Goldenhome Co
Performance |
| Timeline |
| Zhongshan Broad Ocean |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Xiamen Goldenhome |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Zhongshan Broad-Ocean and Xiamen Goldenhome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongshan Broad-Ocean and Xiamen Goldenhome
The main advantage of trading using opposite Zhongshan Broad-Ocean and Xiamen Goldenhome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongshan Broad-Ocean position performs unexpectedly, Xiamen Goldenhome 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 Xiamen Goldenhome will offset losses from the drop in Xiamen Goldenhome's long position.The idea behind Zhongshan Broad Ocean Motor and Xiamen Goldenhome Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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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