Correlation Between Levima Advanced and Zhejiang Construction
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By analyzing existing cross correlation between Levima Advanced Materials and Zhejiang Construction Investment, you can compare the effects of market volatilities on Levima Advanced and Zhejiang Construction 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 Levima Advanced with a short position of Zhejiang Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Levima Advanced and Zhejiang Construction.
Diversification Opportunities for Levima Advanced and Zhejiang Construction
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Levima and Zhejiang is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Levima Advanced Materials and Zhejiang Construction Investme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Construction and Levima Advanced 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 Levima Advanced Materials are associated (or correlated) with Zhejiang Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Construction has no effect on the direction of Levima Advanced i.e., Levima Advanced and Zhejiang Construction go up and down completely randomly.
Pair Corralation between Levima Advanced and Zhejiang Construction
Assuming the 90 days trading horizon Levima Advanced Materials is expected to under-perform the Zhejiang Construction. But the stock apears to be less risky and, when comparing its historical volatility, Levima Advanced Materials is 2.07 times less risky than Zhejiang Construction. The stock trades about -0.07 of its potential returns per unit of risk. The Zhejiang Construction Investment is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 911.00 in Zhejiang Construction Investment on September 1, 2024 and sell it today you would earn a total of 90.00 from holding Zhejiang Construction Investment or generate 9.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Levima Advanced Materials vs. Zhejiang Construction Investme
Performance |
| Timeline |
| Levima Advanced Materials |
| Zhejiang Construction |
Levima Advanced and Zhejiang Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Levima Advanced and Zhejiang Construction
The main advantage of trading using opposite Levima Advanced and Zhejiang Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Levima Advanced position performs unexpectedly, Zhejiang Construction 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 Zhejiang Construction will offset losses from the drop in Zhejiang Construction's long position.| Levima Advanced vs. Gome Telecom Equipment | Levima Advanced vs. Der International Home | Levima Advanced vs. Sunwave Communications Co | Levima Advanced vs. Fiberhome Telecommunication Technologies |
| Zhejiang Construction vs. Industrial and Commercial | Zhejiang Construction vs. China Construction Bank | Zhejiang Construction vs. Bank of China | Zhejiang Construction vs. Agricultural Bank of |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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