Correlation Between Zhejiang Kingland and Tonghua Grape
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By analyzing existing cross correlation between Zhejiang Kingland Pipeline and Tonghua Grape Wine, you can compare the effects of market volatilities on Zhejiang Kingland and Tonghua Grape 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 Tonghua Grape. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Kingland and Tonghua Grape.
Diversification Opportunities for Zhejiang Kingland and Tonghua Grape
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Zhejiang and Tonghua is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Kingland Pipeline and Tonghua Grape Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tonghua Grape Wine 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 Tonghua Grape. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tonghua Grape Wine has no effect on the direction of Zhejiang Kingland i.e., Zhejiang Kingland and Tonghua Grape go up and down completely randomly.
Pair Corralation between Zhejiang Kingland and Tonghua Grape
Assuming the 90 days trading horizon Zhejiang Kingland Pipeline is expected to generate 0.83 times more return on investment than Tonghua Grape. However, Zhejiang Kingland Pipeline is 1.2 times less risky than Tonghua Grape. It trades about 0.0 of its potential returns per unit of risk. Tonghua Grape Wine is currently generating about -0.03 per unit of risk. If you would invest 618.00 in Zhejiang Kingland Pipeline on October 14, 2024 and sell it today you would lose (56.00) from holding Zhejiang Kingland Pipeline or give up 9.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Kingland Pipeline vs. Tonghua Grape Wine
Performance |
| Timeline |
| Zhejiang Kingland |
| Tonghua Grape Wine |
Zhejiang Kingland and Tonghua Grape Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Kingland and Tonghua Grape
The main advantage of trading using opposite Zhejiang Kingland and Tonghua Grape positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Kingland position performs unexpectedly, Tonghua Grape 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 Tonghua Grape will offset losses from the drop in Tonghua Grape's long position.| Zhejiang Kingland vs. Kunwu Jiuding Investment | Zhejiang Kingland vs. China Life Insurance | Zhejiang Kingland vs. Dazhong Transportation Group | Zhejiang Kingland vs. Shanghai Material Trading |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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