Correlation Between Zhejiang Construction and Anhui Huaheng
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By analyzing existing cross correlation between Zhejiang Construction Investment and Anhui Huaheng Biotechnology, you can compare the effects of market volatilities on Zhejiang Construction and Anhui Huaheng 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 Anhui Huaheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Construction and Anhui Huaheng.
Diversification Opportunities for Zhejiang Construction and Anhui Huaheng
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and Anhui is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Construction Investme and Anhui Huaheng Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Huaheng Biotec 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 Anhui Huaheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Huaheng Biotec has no effect on the direction of Zhejiang Construction i.e., Zhejiang Construction and Anhui Huaheng go up and down completely randomly.
Pair Corralation between Zhejiang Construction and Anhui Huaheng
Assuming the 90 days trading horizon Zhejiang Construction Investment is expected to generate 0.92 times more return on investment than Anhui Huaheng. However, Zhejiang Construction Investment is 1.09 times less risky than Anhui Huaheng. It trades about -0.37 of its potential returns per unit of risk. Anhui Huaheng Biotechnology is currently generating about -0.4 per unit of risk. If you would invest 941.00 in Zhejiang Construction Investment on October 25, 2024 and sell it today you would lose (127.00) from holding Zhejiang Construction Investment or give up 13.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Construction Investme vs. Anhui Huaheng Biotechnology
Performance |
| Timeline |
| Zhejiang Construction |
| Anhui Huaheng Biotec |
Zhejiang Construction and Anhui Huaheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Construction and Anhui Huaheng
The main advantage of trading using opposite Zhejiang Construction and Anhui Huaheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Construction position performs unexpectedly, Anhui Huaheng 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 Anhui Huaheng will offset losses from the drop in Anhui Huaheng's long position.| Zhejiang Construction vs. Dareway Software Co | Zhejiang Construction vs. Impulse Qingdao Health | Zhejiang Construction vs. Hangzhou Pinming Software | Zhejiang Construction vs. Youngy Health Co |
| Anhui Huaheng vs. Holitech Technology Co | Anhui Huaheng vs. Kangping Technology Co | Anhui Huaheng vs. Olympic Circuit Technology | Anhui Huaheng vs. HanS Laser Tech |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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