Correlation Between Zhejiang Construction and Sihui Fuji
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By analyzing existing cross correlation between Zhejiang Construction Investment and Sihui Fuji Electronics, you can compare the effects of market volatilities on Zhejiang Construction and Sihui Fuji 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 Sihui Fuji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Construction and Sihui Fuji.
Diversification Opportunities for Zhejiang Construction and Sihui Fuji
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zhejiang and Sihui is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Construction Investme and Sihui Fuji Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sihui Fuji Electronics 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 Sihui Fuji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sihui Fuji Electronics has no effect on the direction of Zhejiang Construction i.e., Zhejiang Construction and Sihui Fuji go up and down completely randomly.
Pair Corralation between Zhejiang Construction and Sihui Fuji
Assuming the 90 days trading horizon Zhejiang Construction Investment is expected to under-perform the Sihui Fuji. But the stock apears to be less risky and, when comparing its historical volatility, Zhejiang Construction Investment is 2.09 times less risky than Sihui Fuji. The stock trades about -0.28 of its potential returns per unit of risk. The Sihui Fuji Electronics is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,767 in Sihui Fuji Electronics on October 23, 2024 and sell it today you would earn a total of 160.00 from holding Sihui Fuji Electronics or generate 5.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Construction Investme vs. Sihui Fuji Electronics
Performance |
| Timeline |
| Zhejiang Construction |
| Sihui Fuji Electronics |
Zhejiang Construction and Sihui Fuji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Construction and Sihui Fuji
The main advantage of trading using opposite Zhejiang Construction and Sihui Fuji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Construction position performs unexpectedly, Sihui Fuji 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 Sihui Fuji will offset losses from the drop in Sihui Fuji's long position.The idea behind Zhejiang Construction Investment and Sihui Fuji Electronics 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.
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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