Correlation Between Zhejiang Construction and China Longyuan
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By analyzing existing cross correlation between Zhejiang Construction Investment and China Longyuan Power, you can compare the effects of market volatilities on Zhejiang Construction and China Longyuan 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 Zhejiang Construction with a short position of China Longyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Construction and China Longyuan.
Diversification Opportunities for Zhejiang Construction and China Longyuan
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and China is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Construction Investme and China Longyuan Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Longyuan Power and Zhejiang Construction 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 Zhejiang Construction Investment are associated (or correlated) with China Longyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Longyuan Power has no effect on the direction of Zhejiang Construction i.e., Zhejiang Construction and China Longyuan go up and down completely randomly.
Pair Corralation between Zhejiang Construction and China Longyuan
Assuming the 90 days trading horizon Zhejiang Construction Investment is expected to generate 1.59 times more return on investment than China Longyuan. However, Zhejiang Construction is 1.59 times more volatile than China Longyuan Power. It trades about 0.0 of its potential returns per unit of risk. China Longyuan Power is currently generating about -0.02 per unit of risk. If you would invest 1,200 in Zhejiang Construction Investment on September 14, 2024 and sell it today you would lose (141.00) from holding Zhejiang Construction Investment or give up 11.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.61% |
| Values | Daily Returns |
Zhejiang Construction Investme vs. China Longyuan Power
Performance |
| Timeline |
| Zhejiang Construction |
| China Longyuan Power |
Zhejiang Construction and China Longyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Construction and China Longyuan
The main advantage of trading using opposite Zhejiang Construction and China Longyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Construction position performs unexpectedly, China Longyuan 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 China Longyuan will offset losses from the drop in China Longyuan's long position.| Zhejiang Construction vs. Sinomach General Machinery | Zhejiang Construction vs. Qijing Machinery | Zhejiang Construction vs. Hangzhou Pinming Software | Zhejiang Construction vs. Panda Financial Holding |
| China Longyuan vs. Zhejiang Construction Investment | China Longyuan vs. Zhuhai Comleader Information | China Longyuan vs. Westone Information Industry | China Longyuan vs. Jiugui Liquor Co |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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