Correlation Between Muyuan Foodstuff and Zhejiang Huayou
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By analyzing existing cross correlation between Muyuan Foodstuff Co and Zhejiang Huayou Cobalt, you can compare the effects of market volatilities on Muyuan Foodstuff and Zhejiang Huayou 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 Muyuan Foodstuff with a short position of Zhejiang Huayou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muyuan Foodstuff and Zhejiang Huayou.
Diversification Opportunities for Muyuan Foodstuff and Zhejiang Huayou
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Muyuan and Zhejiang is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Muyuan Foodstuff Co and Zhejiang Huayou Cobalt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Huayou Cobalt and Muyuan Foodstuff 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 Muyuan Foodstuff Co are associated (or correlated) with Zhejiang Huayou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Huayou Cobalt has no effect on the direction of Muyuan Foodstuff i.e., Muyuan Foodstuff and Zhejiang Huayou go up and down completely randomly.
Pair Corralation between Muyuan Foodstuff and Zhejiang Huayou
Assuming the 90 days trading horizon Muyuan Foodstuff Co is expected to generate 0.69 times more return on investment than Zhejiang Huayou. However, Muyuan Foodstuff Co is 1.44 times less risky than Zhejiang Huayou. It trades about -0.02 of its potential returns per unit of risk. Zhejiang Huayou Cobalt is currently generating about -0.05 per unit of risk. If you would invest 4,631 in Muyuan Foodstuff Co on October 16, 2024 and sell it today you would lose (1,006) from holding Muyuan Foodstuff Co or give up 21.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Muyuan Foodstuff Co vs. Zhejiang Huayou Cobalt
Performance |
| Timeline |
| Muyuan Foodstuff |
| Zhejiang Huayou Cobalt |
Muyuan Foodstuff and Zhejiang Huayou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Muyuan Foodstuff and Zhejiang Huayou
The main advantage of trading using opposite Muyuan Foodstuff and Zhejiang Huayou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muyuan Foodstuff position performs unexpectedly, Zhejiang Huayou 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 Huayou will offset losses from the drop in Zhejiang Huayou's long position.| Muyuan Foodstuff vs. Shanghai Phichem Material | Muyuan Foodstuff vs. Guangzhou Restaurants Group | Muyuan Foodstuff vs. Dazhong Transportation Group | Muyuan Foodstuff vs. Hangzhou Arcvideo Technology |
| Zhejiang Huayou vs. Zijin Mining Group | Zhejiang Huayou vs. Wanhua Chemical Group | Zhejiang Huayou vs. Baoshan Iron Steel | Zhejiang Huayou vs. Shandong Gold Mining |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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