Correlation Between Dongjiang Environmental and ZheJiang Haers
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By analyzing existing cross correlation between Dongjiang Environmental Co and ZheJiang Haers Vacuum, you can compare the effects of market volatilities on Dongjiang Environmental and ZheJiang Haers 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 Dongjiang Environmental with a short position of ZheJiang Haers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongjiang Environmental and ZheJiang Haers.
Diversification Opportunities for Dongjiang Environmental and ZheJiang Haers
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dongjiang and ZheJiang is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Dongjiang Environmental Co and ZheJiang Haers Vacuum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZheJiang Haers Vacuum and Dongjiang Environmental 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 Dongjiang Environmental Co are associated (or correlated) with ZheJiang Haers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZheJiang Haers Vacuum has no effect on the direction of Dongjiang Environmental i.e., Dongjiang Environmental and ZheJiang Haers go up and down completely randomly.
Pair Corralation between Dongjiang Environmental and ZheJiang Haers
Assuming the 90 days trading horizon Dongjiang Environmental is expected to generate 6.34 times less return on investment than ZheJiang Haers. But when comparing it to its historical volatility, Dongjiang Environmental Co is 1.16 times less risky than ZheJiang Haers. It trades about 0.01 of its potential returns per unit of risk. ZheJiang Haers Vacuum is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 694.00 in ZheJiang Haers Vacuum on September 4, 2024 and sell it today you would earn a total of 156.00 from holding ZheJiang Haers Vacuum or generate 22.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongjiang Environmental Co vs. ZheJiang Haers Vacuum
Performance |
| Timeline |
| Dongjiang Environmental |
| ZheJiang Haers Vacuum |
Dongjiang Environmental and ZheJiang Haers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongjiang Environmental and ZheJiang Haers
The main advantage of trading using opposite Dongjiang Environmental and ZheJiang Haers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongjiang Environmental position performs unexpectedly, ZheJiang Haers 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 Haers will offset losses from the drop in ZheJiang Haers' long position.| Dongjiang Environmental vs. Ming Yang Smart | Dongjiang Environmental vs. 159681 | Dongjiang Environmental vs. 159005 | Dongjiang Environmental vs. 516220 |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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