Correlation Between ZhongAn Online and AENA SME
Can any of the company-specific risk be diversified away by investing in both ZhongAn Online and AENA SME 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 AENA SME 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 AENA SME UNSPADR110, you can compare the effects of market volatilities on ZhongAn Online and AENA SME 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 AENA SME. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZhongAn Online and AENA SME.
Diversification Opportunities for ZhongAn Online and AENA SME
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between ZhongAn and AENA is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding ZhongAn Online P and AENA SME UNSPADR110 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AENA SME UNSPADR110 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 AENA SME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AENA SME UNSPADR110 has no effect on the direction of ZhongAn Online i.e., ZhongAn Online and AENA SME go up and down completely randomly.
Pair Corralation between ZhongAn Online and AENA SME
Assuming the 90 days trading horizon ZhongAn Online P is expected to under-perform the AENA SME. In addition to that, ZhongAn Online is 2.27 times more volatile than AENA SME UNSPADR110. It trades about -0.03 of its total potential returns per unit of risk. AENA SME UNSPADR110 is currently generating about 0.07 per unit of volatility. If you would invest 1,201 in AENA SME UNSPADR110 on October 23, 2024 and sell it today you would earn a total of 739.00 from holding AENA SME UNSPADR110 or generate 61.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZhongAn Online P vs. AENA SME UNSPADR110
Performance |
| Timeline |
| ZhongAn Online P |
| AENA SME UNSPADR110 |
ZhongAn Online and AENA SME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZhongAn Online and AENA SME
The main advantage of trading using opposite ZhongAn Online and AENA SME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZhongAn Online position performs unexpectedly, AENA SME 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 AENA SME will offset losses from the drop in AENA SME's long position.| ZhongAn Online vs. Titan Machinery | ZhongAn Online vs. Siemens Healthineers AG | ZhongAn Online vs. Federal Agricultural Mortgage | ZhongAn Online vs. Dairy Farm International |
| AENA SME vs. ZhongAn Online P | AENA SME vs. ASURE SOFTWARE | AENA SME vs. GungHo Online Entertainment | AENA SME vs. Take Two Interactive Software |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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