Correlation Between Zhejiang JIULI and Shandong Homey
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By analyzing existing cross correlation between Zhejiang JIULI Hi tech and Shandong Homey Aquatic, you can compare the effects of market volatilities on Zhejiang JIULI and Shandong Homey 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 Shandong Homey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang JIULI and Shandong Homey.
Diversification Opportunities for Zhejiang JIULI and Shandong Homey
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Shandong is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang JIULI Hi tech and Shandong Homey Aquatic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Homey Aquatic 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 Shandong Homey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Homey Aquatic has no effect on the direction of Zhejiang JIULI i.e., Zhejiang JIULI and Shandong Homey go up and down completely randomly.
Pair Corralation between Zhejiang JIULI and Shandong Homey
Assuming the 90 days trading horizon Zhejiang JIULI is expected to generate 15.47 times less return on investment than Shandong Homey. But when comparing it to its historical volatility, Zhejiang JIULI Hi tech is 3.36 times less risky than Shandong Homey. It trades about 0.04 of its potential returns per unit of risk. Shandong Homey Aquatic is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 200.00 in Shandong Homey Aquatic on August 29, 2024 and sell it today you would earn a total of 39.00 from holding Shandong Homey Aquatic or generate 19.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang JIULI Hi tech vs. Shandong Homey Aquatic
Performance |
| Timeline |
| Zhejiang JIULI Hi |
| Shandong Homey Aquatic |
Zhejiang JIULI and Shandong Homey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang JIULI and Shandong Homey
The main advantage of trading using opposite Zhejiang JIULI and Shandong Homey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang JIULI position performs unexpectedly, Shandong Homey 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 Shandong Homey will offset losses from the drop in Shandong Homey's long position.| Zhejiang JIULI vs. Shaanxi Broadcast TV | Zhejiang JIULI vs. Anhui Transport Consulting | Zhejiang JIULI vs. Longjian Road Bridge | Zhejiang JIULI vs. King Strong New Material |
| Shandong Homey vs. PetroChina Co Ltd | Shandong Homey vs. China Mobile Limited | Shandong Homey vs. Ping An Insurance | Shandong Homey vs. China Petroleum Chemical |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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