Correlation Between Luolai Home and Zhejiang Daily
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By analyzing existing cross correlation between Luolai Home Textile and Zhejiang Daily Media, you can compare the effects of market volatilities on Luolai Home and Zhejiang Daily 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 Luolai Home with a short position of Zhejiang Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luolai Home and Zhejiang Daily.
Diversification Opportunities for Luolai Home and Zhejiang Daily
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Luolai and Zhejiang is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Luolai Home Textile and Zhejiang Daily Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Daily Media and Luolai Home 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 Luolai Home Textile are associated (or correlated) with Zhejiang Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Daily Media has no effect on the direction of Luolai Home i.e., Luolai Home and Zhejiang Daily go up and down completely randomly.
Pair Corralation between Luolai Home and Zhejiang Daily
Assuming the 90 days trading horizon Luolai Home is expected to generate 2.36 times less return on investment than Zhejiang Daily. But when comparing it to its historical volatility, Luolai Home Textile is 1.21 times less risky than Zhejiang Daily. It trades about 0.04 of its potential returns per unit of risk. Zhejiang Daily Media is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 934.00 in Zhejiang Daily Media on September 3, 2024 and sell it today you would earn a total of 180.00 from holding Zhejiang Daily Media or generate 19.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luolai Home Textile vs. Zhejiang Daily Media
Performance |
| Timeline |
| Luolai Home Textile |
| Zhejiang Daily Media |
Luolai Home and Zhejiang Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luolai Home and Zhejiang Daily
The main advantage of trading using opposite Luolai Home and Zhejiang Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luolai Home position performs unexpectedly, Zhejiang Daily 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 Zhejiang Daily will offset losses from the drop in Zhejiang Daily's long position.| Luolai Home vs. PetroChina Co Ltd | Luolai Home vs. China Mobile Limited | Luolai Home vs. Industrial and Commercial | Luolai Home vs. China Life Insurance |
| Zhejiang Daily vs. Metro Investment Development | Zhejiang Daily vs. Nuode Investment Co | Zhejiang Daily vs. Nexchip Semiconductor Corp | Zhejiang Daily vs. Hunan Investment Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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