Correlation Between ZYF Lopsking and Wuxi Chemical
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By analyzing existing cross correlation between ZYF Lopsking Aluminum and Wuxi Chemical Equipment, you can compare the effects of market volatilities on ZYF Lopsking 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 ZYF Lopsking with a short position of Wuxi Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZYF Lopsking and Wuxi Chemical.
Diversification Opportunities for ZYF Lopsking and Wuxi Chemical
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ZYF and Wuxi is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding ZYF Lopsking Aluminum 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 ZYF Lopsking 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 ZYF Lopsking Aluminum 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 ZYF Lopsking i.e., ZYF Lopsking and Wuxi Chemical go up and down completely randomly.
Pair Corralation between ZYF Lopsking and Wuxi Chemical
Assuming the 90 days trading horizon ZYF Lopsking is expected to generate 1.2 times less return on investment than Wuxi Chemical. In addition to that, ZYF Lopsking is 1.03 times more volatile than Wuxi Chemical Equipment. It trades about 0.12 of its total potential returns per unit of risk. Wuxi Chemical Equipment is currently generating about 0.15 per unit of volatility. If you would invest 3,413 in Wuxi Chemical Equipment on September 3, 2024 and sell it today you would earn a total of 228.00 from holding Wuxi Chemical Equipment or generate 6.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZYF Lopsking Aluminum vs. Wuxi Chemical Equipment
Performance |
| Timeline |
| ZYF Lopsking Aluminum |
| Wuxi Chemical Equipment |
ZYF Lopsking and Wuxi Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZYF Lopsking and Wuxi Chemical
The main advantage of trading using opposite ZYF Lopsking and Wuxi Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZYF Lopsking 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.| ZYF Lopsking vs. Zijin Mining Group | ZYF Lopsking vs. Baoshan Iron Steel | ZYF Lopsking vs. Rongsheng Petrochemical Co | ZYF Lopsking vs. Hoshine Silicon Ind |
| Wuxi Chemical vs. CITIC Guoan Information | Wuxi Chemical vs. Shenzhen SDG Information | Wuxi Chemical vs. Kangxin New Materials | Wuxi Chemical vs. Jinsanjiang Silicon Material |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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