Correlation Between Changchun and Zhongzhu Medical
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By analyzing existing cross correlation between Changchun UP Optotech and Zhongzhu Medical Holdings, you can compare the effects of market volatilities on Changchun and Zhongzhu Medical 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 Changchun with a short position of Zhongzhu Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun and Zhongzhu Medical.
Diversification Opportunities for Changchun and Zhongzhu Medical
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Changchun and Zhongzhu is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Changchun UP Optotech and Zhongzhu Medical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongzhu Medical Holdings and Changchun 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 Changchun UP Optotech are associated (or correlated) with Zhongzhu Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongzhu Medical Holdings has no effect on the direction of Changchun i.e., Changchun and Zhongzhu Medical go up and down completely randomly.
Pair Corralation between Changchun and Zhongzhu Medical
Assuming the 90 days trading horizon Changchun UP Optotech is expected to generate 1.15 times more return on investment than Zhongzhu Medical. However, Changchun is 1.15 times more volatile than Zhongzhu Medical Holdings. It trades about -0.02 of its potential returns per unit of risk. Zhongzhu Medical Holdings is currently generating about -0.31 per unit of risk. If you would invest 4,010 in Changchun UP Optotech on October 20, 2024 and sell it today you would lose (76.00) from holding Changchun UP Optotech or give up 1.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun UP Optotech vs. Zhongzhu Medical Holdings
Performance |
| Timeline |
| Changchun UP Optotech |
| Zhongzhu Medical Holdings |
Changchun and Zhongzhu Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun and Zhongzhu Medical
The main advantage of trading using opposite Changchun and Zhongzhu Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun position performs unexpectedly, Zhongzhu Medical 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 Zhongzhu Medical will offset losses from the drop in Zhongzhu Medical's long position.| Changchun vs. Liaoning Dingjide Petrochemical | Changchun vs. Shandong Rike Chemical | Changchun vs. Jiamei Food Packaging | Changchun vs. Bohai Leasing Co |
| Zhongzhu Medical vs. Shanghai Yanpu Metal | Zhongzhu Medical vs. Pengxin International Mining | Zhongzhu Medical vs. Shaanxi Construction Machinery | Zhongzhu Medical vs. Air China Ltd |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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