Correlation Between ZhongAn Online and TRADEGATE
Can any of the company-specific risk be diversified away by investing in both ZhongAn Online and TRADEGATE 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 TRADEGATE 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 TRADEGATE, you can compare the effects of market volatilities on ZhongAn Online and TRADEGATE 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 TRADEGATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZhongAn Online and TRADEGATE.
Diversification Opportunities for ZhongAn Online and TRADEGATE
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ZhongAn and TRADEGATE is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding ZhongAn Online P and TRADEGATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEGATE 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 TRADEGATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEGATE has no effect on the direction of ZhongAn Online i.e., ZhongAn Online and TRADEGATE go up and down completely randomly.
Pair Corralation between ZhongAn Online and TRADEGATE
Assuming the 90 days trading horizon ZhongAn Online P is expected to generate 3.71 times more return on investment than TRADEGATE. However, ZhongAn Online is 3.71 times more volatile than TRADEGATE. It trades about 0.02 of its potential returns per unit of risk. TRADEGATE is currently generating about -0.06 per unit of risk. If you would invest 150.00 in ZhongAn Online P on November 3, 2024 and sell it today you would lose (5.00) from holding ZhongAn Online P or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZhongAn Online P vs. TRADEGATE
Performance |
| Timeline |
| ZhongAn Online P |
| TRADEGATE |
ZhongAn Online and TRADEGATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZhongAn Online and TRADEGATE
The main advantage of trading using opposite ZhongAn Online and TRADEGATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZhongAn Online position performs unexpectedly, TRADEGATE 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 TRADEGATE will offset losses from the drop in TRADEGATE's long position.| ZhongAn Online vs. SENECA FOODS A | ZhongAn Online vs. Casio Computer CoLtd | ZhongAn Online vs. GMO Internet | ZhongAn Online vs. Verizon Communications |
| TRADEGATE vs. STRAYER EDUCATION | TRADEGATE vs. American Public Education | TRADEGATE vs. Melco Resorts Entertainment | TRADEGATE vs. G8 EDUCATION |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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