Correlation Between Zhejiang Construction and Jinsanjiang Silicon
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By analyzing existing cross correlation between Zhejiang Construction Investment and Jinsanjiang Silicon Material, you can compare the effects of market volatilities on Zhejiang Construction and Jinsanjiang Silicon 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 Jinsanjiang Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Construction and Jinsanjiang Silicon.
Diversification Opportunities for Zhejiang Construction and Jinsanjiang Silicon
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Zhejiang and Jinsanjiang is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Construction Investme and Jinsanjiang Silicon Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinsanjiang Silicon 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 Jinsanjiang Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinsanjiang Silicon has no effect on the direction of Zhejiang Construction i.e., Zhejiang Construction and Jinsanjiang Silicon go up and down completely randomly.
Pair Corralation between Zhejiang Construction and Jinsanjiang Silicon
Assuming the 90 days trading horizon Zhejiang Construction Investment is expected to generate 0.37 times more return on investment than Jinsanjiang Silicon. However, Zhejiang Construction Investment is 2.67 times less risky than Jinsanjiang Silicon. It trades about -0.14 of its potential returns per unit of risk. Jinsanjiang Silicon Material is currently generating about -0.18 per unit of risk. If you would invest 860.00 in Zhejiang Construction Investment on November 3, 2024 and sell it today you would lose (40.00) from holding Zhejiang Construction Investment or give up 4.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Construction Investme vs. Jinsanjiang Silicon Material
Performance |
| Timeline |
| Zhejiang Construction |
| Jinsanjiang Silicon |
Zhejiang Construction and Jinsanjiang Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Construction and Jinsanjiang Silicon
The main advantage of trading using opposite Zhejiang Construction and Jinsanjiang Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Construction position performs unexpectedly, Jinsanjiang Silicon 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 Jinsanjiang Silicon will offset losses from the drop in Jinsanjiang Silicon's long position.The idea behind Zhejiang Construction Investment and Jinsanjiang Silicon Material 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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