Correlation Between ZhongAn Online and PLAY2CHILL
Can any of the company-specific risk be diversified away by investing in both ZhongAn Online and PLAY2CHILL at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ZhongAn Online and PLAY2CHILL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZhongAn Online P and PLAY2CHILL SA ZY, you can compare the effects of market volatilities on ZhongAn Online and PLAY2CHILL 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 ZhongAn Online with a short position of PLAY2CHILL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZhongAn Online and PLAY2CHILL.
Diversification Opportunities for ZhongAn Online and PLAY2CHILL
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between ZhongAn and PLAY2CHILL is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding ZhongAn Online P and PLAY2CHILL SA ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAY2CHILL SA ZY and ZhongAn Online 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 ZhongAn Online P are associated (or correlated) with PLAY2CHILL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAY2CHILL SA ZY has no effect on the direction of ZhongAn Online i.e., ZhongAn Online and PLAY2CHILL go up and down completely randomly.
Pair Corralation between ZhongAn Online and PLAY2CHILL
Assuming the 90 days trading horizon ZhongAn Online P is expected to under-perform the PLAY2CHILL. In addition to that, ZhongAn Online is 1.01 times more volatile than PLAY2CHILL SA ZY. It trades about -0.55 of its total potential returns per unit of risk. PLAY2CHILL SA ZY is currently generating about -0.3 per unit of volatility. If you would invest 90.00 in PLAY2CHILL SA ZY on October 10, 2024 and sell it today you would lose (10.00) from holding PLAY2CHILL SA ZY or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZhongAn Online P vs. PLAY2CHILL SA ZY
Performance |
| Timeline |
| ZhongAn Online P |
| PLAY2CHILL SA ZY |
ZhongAn Online and PLAY2CHILL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZhongAn Online and PLAY2CHILL
The main advantage of trading using opposite ZhongAn Online and PLAY2CHILL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZhongAn Online position performs unexpectedly, PLAY2CHILL 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 PLAY2CHILL will offset losses from the drop in PLAY2CHILL's long position.| ZhongAn Online vs. North American Construction | ZhongAn Online vs. Align Technology | ZhongAn Online vs. GRUPO CARSO A1 | ZhongAn Online vs. FANDIFI TECHNOLOGY P |
| PLAY2CHILL vs. Sea Limited | PLAY2CHILL vs. Electronic Arts | PLAY2CHILL vs. NEXON Co | PLAY2CHILL vs. NEXON 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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