Correlation Between Zhejiang Kingland and China Greatwall
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By analyzing existing cross correlation between Zhejiang Kingland Pipeline and China Greatwall Computer, you can compare the effects of market volatilities on Zhejiang Kingland and China Greatwall 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 Kingland with a short position of China Greatwall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Kingland and China Greatwall.
Diversification Opportunities for Zhejiang Kingland and China Greatwall
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and China is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Kingland Pipeline and China Greatwall Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Greatwall Computer and Zhejiang Kingland 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 Kingland Pipeline are associated (or correlated) with China Greatwall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Greatwall Computer has no effect on the direction of Zhejiang Kingland i.e., Zhejiang Kingland and China Greatwall go up and down completely randomly.
Pair Corralation between Zhejiang Kingland and China Greatwall
Assuming the 90 days trading horizon Zhejiang Kingland is expected to generate 6.61 times less return on investment than China Greatwall. But when comparing it to its historical volatility, Zhejiang Kingland Pipeline is 1.72 times less risky than China Greatwall. It trades about 0.02 of its potential returns per unit of risk. China Greatwall Computer is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 932.00 in China Greatwall Computer on November 8, 2024 and sell it today you would earn a total of 436.00 from holding China Greatwall Computer or generate 46.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.57% |
| Values | Daily Returns |
Zhejiang Kingland Pipeline vs. China Greatwall Computer
Performance |
| Timeline |
| Zhejiang Kingland |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| China Greatwall Computer |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Zhejiang Kingland and China Greatwall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Kingland and China Greatwall
The main advantage of trading using opposite Zhejiang Kingland and China Greatwall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Kingland position performs unexpectedly, China Greatwall 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 Greatwall will offset losses from the drop in China Greatwall's long position.The idea behind Zhejiang Kingland Pipeline and China Greatwall Computer 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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