Correlation Between Zhejiang JIULI and Wuxi Chemical
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By analyzing existing cross correlation between Zhejiang JIULI Hi tech and Wuxi Chemical Equipment, you can compare the effects of market volatilities on Zhejiang JIULI and Wuxi Chemical 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 JIULI with a short position of Wuxi Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang JIULI and Wuxi Chemical.
Diversification Opportunities for Zhejiang JIULI and Wuxi Chemical
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and Wuxi is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang JIULI Hi tech and Wuxi Chemical Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuxi Chemical Equipment and Zhejiang JIULI 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 JIULI Hi tech are associated (or correlated) with Wuxi Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuxi Chemical Equipment has no effect on the direction of Zhejiang JIULI i.e., Zhejiang JIULI and Wuxi Chemical go up and down completely randomly.
Pair Corralation between Zhejiang JIULI and Wuxi Chemical
Assuming the 90 days trading horizon Zhejiang JIULI Hi tech is expected to generate 0.49 times more return on investment than Wuxi Chemical. However, Zhejiang JIULI Hi tech is 2.06 times less risky than Wuxi Chemical. It trades about -0.21 of its potential returns per unit of risk. Wuxi Chemical Equipment is currently generating about -0.18 per unit of risk. If you would invest 2,389 in Zhejiang JIULI Hi tech on October 14, 2024 and sell it today you would lose (104.00) from holding Zhejiang JIULI Hi tech or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang JIULI Hi tech vs. Wuxi Chemical Equipment
Performance |
| Timeline |
| Zhejiang JIULI Hi |
| Wuxi Chemical Equipment |
Zhejiang JIULI and Wuxi Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang JIULI and Wuxi Chemical
The main advantage of trading using opposite Zhejiang JIULI and Wuxi Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang JIULI position performs unexpectedly, Wuxi Chemical 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 Wuxi Chemical will offset losses from the drop in Wuxi Chemical's long position.| Zhejiang JIULI vs. Hengdian Entertainment Co | Zhejiang JIULI vs. Sportsoul Co Ltd | Zhejiang JIULI vs. Thinkingdom Media Group | Zhejiang JIULI vs. Heilongjiang Publishing Media |
| Wuxi Chemical vs. Guangdong Silvere Sci | Wuxi Chemical vs. Uroica Mining Safety | Wuxi Chemical vs. Zhejiang JIULI Hi tech | Wuxi Chemical vs. Xinjiang Baodi Mining |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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