Correlation Between Chengdu Xinzhu and Zhongshan Broad
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By analyzing existing cross correlation between Chengdu Xinzhu RoadBridge and Zhongshan Broad Ocean Motor, you can compare the effects of market volatilities on Chengdu Xinzhu and Zhongshan Broad 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 Chengdu Xinzhu with a short position of Zhongshan Broad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Xinzhu and Zhongshan Broad.
Diversification Opportunities for Chengdu Xinzhu and Zhongshan Broad
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chengdu and Zhongshan is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Xinzhu RoadBridge and Zhongshan Broad Ocean Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongshan Broad Ocean and Chengdu Xinzhu 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 Chengdu Xinzhu RoadBridge are associated (or correlated) with Zhongshan Broad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongshan Broad Ocean has no effect on the direction of Chengdu Xinzhu i.e., Chengdu Xinzhu and Zhongshan Broad go up and down completely randomly.
Pair Corralation between Chengdu Xinzhu and Zhongshan Broad
Assuming the 90 days trading horizon Chengdu Xinzhu RoadBridge is expected to generate 1.51 times more return on investment than Zhongshan Broad. However, Chengdu Xinzhu is 1.51 times more volatile than Zhongshan Broad Ocean Motor. It trades about 0.05 of its potential returns per unit of risk. Zhongshan Broad Ocean Motor is currently generating about -0.04 per unit of risk. If you would invest 520.00 in Chengdu Xinzhu RoadBridge on October 28, 2024 and sell it today you would earn a total of 15.00 from holding Chengdu Xinzhu RoadBridge or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Xinzhu RoadBridge vs. Zhongshan Broad Ocean Motor
Performance |
| Timeline |
| Chengdu Xinzhu RoadBridge |
| Zhongshan Broad Ocean |
Chengdu Xinzhu and Zhongshan Broad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Xinzhu and Zhongshan Broad
The main advantage of trading using opposite Chengdu Xinzhu and Zhongshan Broad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Xinzhu position performs unexpectedly, Zhongshan Broad 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 Zhongshan Broad will offset losses from the drop in Zhongshan Broad's long position.| Chengdu Xinzhu vs. Hefei Metalforming Mach | Chengdu Xinzhu vs. Harvest Fund Management | Chengdu Xinzhu vs. Shanghai CEO Environmental | Chengdu Xinzhu vs. Zoy Home Furnishing |
| Zhongshan Broad vs. Lier Chemical Co | Zhongshan Broad vs. Shandong Polymer Biochemicals | Zhongshan Broad vs. Maoming Petro Chemical Shihua | Zhongshan Broad vs. Lianhe Chemical Technology |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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