Correlation Between Ciwen Media and China Zheshang
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By analyzing existing cross correlation between Ciwen Media Co and China Zheshang Bank, you can compare the effects of market volatilities on Ciwen Media and China Zheshang 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 Ciwen Media with a short position of China Zheshang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ciwen Media and China Zheshang.
Diversification Opportunities for Ciwen Media and China Zheshang
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ciwen and China is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ciwen Media Co and China Zheshang Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Zheshang Bank and Ciwen Media 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 Ciwen Media Co are associated (or correlated) with China Zheshang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Zheshang Bank has no effect on the direction of Ciwen Media i.e., Ciwen Media and China Zheshang go up and down completely randomly.
Pair Corralation between Ciwen Media and China Zheshang
Assuming the 90 days trading horizon Ciwen Media Co is expected to generate 2.22 times more return on investment than China Zheshang. However, Ciwen Media is 2.22 times more volatile than China Zheshang Bank. It trades about 0.27 of its potential returns per unit of risk. China Zheshang Bank is currently generating about 0.08 per unit of risk. If you would invest 589.00 in Ciwen Media Co on November 10, 2024 and sell it today you would earn a total of 64.00 from holding Ciwen Media Co or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Ciwen Media Co vs. China Zheshang Bank
Performance |
| Timeline |
| Ciwen Media |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| China Zheshang Bank |
Ciwen Media and China Zheshang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ciwen Media and China Zheshang
The main advantage of trading using opposite Ciwen Media and China Zheshang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ciwen Media position performs unexpectedly, China Zheshang 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 China Zheshang will offset losses from the drop in China Zheshang's long position.The idea behind Ciwen Media Co and China Zheshang Bank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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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