Correlation Between Zhejiang Kingland and Sichuan Fulin
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By analyzing existing cross correlation between Zhejiang Kingland Pipeline and Sichuan Fulin Transportation, you can compare the effects of market volatilities on Zhejiang Kingland and Sichuan Fulin 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 Sichuan Fulin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Kingland and Sichuan Fulin.
Diversification Opportunities for Zhejiang Kingland and Sichuan Fulin
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Sichuan is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Kingland Pipeline and Sichuan Fulin Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Fulin Transp 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 Sichuan Fulin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Fulin Transp has no effect on the direction of Zhejiang Kingland i.e., Zhejiang Kingland and Sichuan Fulin go up and down completely randomly.
Pair Corralation between Zhejiang Kingland and Sichuan Fulin
Assuming the 90 days trading horizon Zhejiang Kingland Pipeline is expected to under-perform the Sichuan Fulin. But the stock apears to be less risky and, when comparing its historical volatility, Zhejiang Kingland Pipeline is 1.5 times less risky than Sichuan Fulin. The stock trades about -0.14 of its potential returns per unit of risk. The Sichuan Fulin Transportation is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 627.00 in Sichuan Fulin Transportation on August 28, 2024 and sell it today you would earn a total of 55.00 from holding Sichuan Fulin Transportation or generate 8.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Kingland Pipeline vs. Sichuan Fulin Transportation
Performance |
| Timeline |
| Zhejiang Kingland |
| Sichuan Fulin Transp |
Zhejiang Kingland and Sichuan Fulin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Kingland and Sichuan Fulin
The main advantage of trading using opposite Zhejiang Kingland and Sichuan Fulin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Kingland position performs unexpectedly, Sichuan Fulin 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 Sichuan Fulin will offset losses from the drop in Sichuan Fulin's long position.| Zhejiang Kingland vs. HaiXin Foods Co | Zhejiang Kingland vs. Juewei Food Co | Zhejiang Kingland vs. Gan Yuan Foods | Zhejiang Kingland vs. Great Sun Foods Co |
| Sichuan Fulin vs. Cambricon Technologies Corp | Sichuan Fulin vs. Loongson Technology Corp | Sichuan Fulin vs. Chongqing Road Bridge | Sichuan Fulin vs. Shenzhen Fortune Trend |
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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