Correlation Between Guangdong Qunxing and Zoje Resources
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By analyzing existing cross correlation between Guangdong Qunxing Toys and Zoje Resources Investment, you can compare the effects of market volatilities on Guangdong Qunxing and Zoje Resources 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 Guangdong Qunxing with a short position of Zoje Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Qunxing and Zoje Resources.
Diversification Opportunities for Guangdong Qunxing and Zoje Resources
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangdong and Zoje is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Qunxing Toys and Zoje Resources Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoje Resources Investment and Guangdong Qunxing 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 Guangdong Qunxing Toys are associated (or correlated) with Zoje Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoje Resources Investment has no effect on the direction of Guangdong Qunxing i.e., Guangdong Qunxing and Zoje Resources go up and down completely randomly.
Pair Corralation between Guangdong Qunxing and Zoje Resources
Assuming the 90 days trading horizon Guangdong Qunxing Toys is expected to under-perform the Zoje Resources. In addition to that, Guangdong Qunxing is 1.05 times more volatile than Zoje Resources Investment. It trades about -0.1 of its total potential returns per unit of risk. Zoje Resources Investment is currently generating about -0.07 per unit of volatility. If you would invest 252.00 in Zoje Resources Investment on November 7, 2024 and sell it today you would lose (10.00) from holding Zoje Resources Investment or give up 3.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Qunxing Toys vs. Zoje Resources Investment
Performance |
| Timeline |
| Guangdong Qunxing Toys |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Zoje Resources Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Guangdong Qunxing and Zoje Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Qunxing and Zoje Resources
The main advantage of trading using opposite Guangdong Qunxing and Zoje Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Qunxing position performs unexpectedly, Zoje Resources 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 Zoje Resources will offset losses from the drop in Zoje Resources' long position.The idea behind Guangdong Qunxing Toys and Zoje Resources Investment 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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