Correlation Between Fujian Rongji and Zhejiang Satellite
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By analyzing existing cross correlation between Fujian Rongji Software and Zhejiang Satellite Petrochemical, you can compare the effects of market volatilities on Fujian Rongji and Zhejiang Satellite 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 Fujian Rongji with a short position of Zhejiang Satellite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Rongji and Zhejiang Satellite.
Diversification Opportunities for Fujian Rongji and Zhejiang Satellite
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fujian and Zhejiang is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Rongji Software and Zhejiang Satellite Petrochemic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Satellite and Fujian Rongji 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 Fujian Rongji Software are associated (or correlated) with Zhejiang Satellite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Satellite has no effect on the direction of Fujian Rongji i.e., Fujian Rongji and Zhejiang Satellite go up and down completely randomly.
Pair Corralation between Fujian Rongji and Zhejiang Satellite
Assuming the 90 days trading horizon Fujian Rongji Software is expected to generate 3.45 times more return on investment than Zhejiang Satellite. However, Fujian Rongji is 3.45 times more volatile than Zhejiang Satellite Petrochemical. It trades about 0.02 of its potential returns per unit of risk. Zhejiang Satellite Petrochemical is currently generating about -0.14 per unit of risk. If you would invest 649.00 in Fujian Rongji Software on August 30, 2024 and sell it today you would lose (2.00) from holding Fujian Rongji Software or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Rongji Software vs. Zhejiang Satellite Petrochemic
Performance |
| Timeline |
| Fujian Rongji Software |
| Zhejiang Satellite |
Fujian Rongji and Zhejiang Satellite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Rongji and Zhejiang Satellite
The main advantage of trading using opposite Fujian Rongji and Zhejiang Satellite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Rongji position performs unexpectedly, Zhejiang Satellite 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 Satellite will offset losses from the drop in Zhejiang Satellite's long position.| Fujian Rongji vs. Ming Yang Smart | Fujian Rongji vs. 159681 | Fujian Rongji vs. 159005 | Fujian Rongji vs. 516220 |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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