Correlation Between Zhejiang Construction and China National
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By analyzing existing cross correlation between Zhejiang Construction Investment and China National Software, you can compare the effects of market volatilities on Zhejiang Construction and China National 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 National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Construction and China National.
Diversification Opportunities for Zhejiang Construction and China National
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and China is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Construction Investme and China National Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China National Software 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 National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China National Software has no effect on the direction of Zhejiang Construction i.e., Zhejiang Construction and China National go up and down completely randomly.
Pair Corralation between Zhejiang Construction and China National
Assuming the 90 days trading horizon Zhejiang Construction is expected to generate 3.14 times less return on investment than China National. But when comparing it to its historical volatility, Zhejiang Construction Investment is 1.04 times less risky than China National. It trades about 0.05 of its potential returns per unit of risk. China National Software is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3,027 in China National Software on September 3, 2024 and sell it today you would earn a total of 2,519 from holding China National Software or generate 83.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.3% |
| Values | Daily Returns |
Zhejiang Construction Investme vs. China National Software
Performance |
| Timeline |
| Zhejiang Construction |
| China National Software |
Zhejiang Construction and China National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Construction and China National
The main advantage of trading using opposite Zhejiang Construction and China National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Construction position performs unexpectedly, China National 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 National will offset losses from the drop in China National's long position.| Zhejiang Construction vs. Chengdu Spaceon Electronics | Zhejiang Construction vs. Anhui Gujing Distillery | Zhejiang Construction vs. Western Metal Materials | Zhejiang Construction vs. China Asset Management |
| China National vs. Shandong Hi Speed RoadBridge | China National vs. Huatian Hotel Group | China National vs. Jiangsu Broadcasting Cable | China National vs. Glodon Software 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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