Correlation Between Bank of Zhengzhou and Datang HuaYin
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By analyzing existing cross correlation between Bank of Zhengzhou and Datang HuaYin Electric, you can compare the effects of market volatilities on Bank of Zhengzhou and Datang HuaYin 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 Bank of Zhengzhou with a short position of Datang HuaYin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Zhengzhou and Datang HuaYin.
Diversification Opportunities for Bank of Zhengzhou and Datang HuaYin
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Datang is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Zhengzhou and Datang HuaYin Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datang HuaYin Electric and Bank of Zhengzhou 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 Bank of Zhengzhou are associated (or correlated) with Datang HuaYin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datang HuaYin Electric has no effect on the direction of Bank of Zhengzhou i.e., Bank of Zhengzhou and Datang HuaYin go up and down completely randomly.
Pair Corralation between Bank of Zhengzhou and Datang HuaYin
Assuming the 90 days trading horizon Bank of Zhengzhou is expected to generate 1.4 times more return on investment than Datang HuaYin. However, Bank of Zhengzhou is 1.4 times more volatile than Datang HuaYin Electric. It trades about 0.07 of its potential returns per unit of risk. Datang HuaYin Electric is currently generating about -0.08 per unit of risk. If you would invest 218.00 in Bank of Zhengzhou on September 12, 2024 and sell it today you would earn a total of 8.00 from holding Bank of Zhengzhou or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Zhengzhou vs. Datang HuaYin Electric
Performance |
| Timeline |
| Bank of Zhengzhou |
| Datang HuaYin Electric |
Bank of Zhengzhou and Datang HuaYin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Zhengzhou and Datang HuaYin
The main advantage of trading using opposite Bank of Zhengzhou and Datang HuaYin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Zhengzhou position performs unexpectedly, Datang HuaYin 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 Datang HuaYin will offset losses from the drop in Datang HuaYin's long position.| Bank of Zhengzhou vs. Zhongshan Broad Ocean Motor | Bank of Zhengzhou vs. Xiamen Jihong Package | Bank of Zhengzhou vs. Anji Foodstuff Co | Bank of Zhengzhou vs. Shandong Hi Speed RoadBridge |
| Datang HuaYin vs. Gansu Jiu Steel | Datang HuaYin vs. Shandong Mining Machinery | Datang HuaYin vs. Aba Chemicals Corp | Datang HuaYin vs. BlueFocus Communication Group |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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