Correlation Between Sichuan Fulin and Zhejiang Yinlun
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By analyzing existing cross correlation between Sichuan Fulin Transportation and Zhejiang Yinlun Machinery, you can compare the effects of market volatilities on Sichuan Fulin and Zhejiang Yinlun 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 Sichuan Fulin with a short position of Zhejiang Yinlun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Fulin and Zhejiang Yinlun.
Diversification Opportunities for Sichuan Fulin and Zhejiang Yinlun
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sichuan and Zhejiang is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Fulin Transportation and Zhejiang Yinlun Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Yinlun Machinery and Sichuan Fulin 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 Sichuan Fulin Transportation are associated (or correlated) with Zhejiang Yinlun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Yinlun Machinery has no effect on the direction of Sichuan Fulin i.e., Sichuan Fulin and Zhejiang Yinlun go up and down completely randomly.
Pair Corralation between Sichuan Fulin and Zhejiang Yinlun
Assuming the 90 days trading horizon Sichuan Fulin is expected to generate 1.53 times less return on investment than Zhejiang Yinlun. In addition to that, Sichuan Fulin is 1.15 times more volatile than Zhejiang Yinlun Machinery. It trades about 0.02 of its total potential returns per unit of risk. Zhejiang Yinlun Machinery is currently generating about 0.04 per unit of volatility. If you would invest 1,370 in Zhejiang Yinlun Machinery on August 25, 2024 and sell it today you would earn a total of 473.00 from holding Zhejiang Yinlun Machinery or generate 34.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Fulin Transportation vs. Zhejiang Yinlun Machinery
Performance |
| Timeline |
| Sichuan Fulin Transp |
| Zhejiang Yinlun Machinery |
Sichuan Fulin and Zhejiang Yinlun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Fulin and Zhejiang Yinlun
The main advantage of trading using opposite Sichuan Fulin and Zhejiang Yinlun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Fulin position performs unexpectedly, Zhejiang Yinlun 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 Zhejiang Yinlun will offset losses from the drop in Zhejiang Yinlun's long position.| Sichuan Fulin vs. Jonjee Hi tech Industrial | Sichuan Fulin vs. ChengDu Hi Tech Development | Sichuan Fulin vs. Iat Automobile Technology | Sichuan Fulin vs. Guangzhou Automobile Group |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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