Correlation Between Zinwell and Chenming Mold
Can any of the company-specific risk be diversified away by investing in both Zinwell and Chenming Mold 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 Zinwell and Chenming Mold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zinwell and Chenming Mold Industrial, you can compare the effects of market volatilities on Zinwell and Chenming Mold 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 Zinwell with a short position of Chenming Mold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zinwell and Chenming Mold.
Diversification Opportunities for Zinwell and Chenming Mold
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Zinwell and Chenming is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Zinwell and Chenming Mold Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chenming Mold Industrial and Zinwell 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 Zinwell are associated (or correlated) with Chenming Mold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chenming Mold Industrial has no effect on the direction of Zinwell i.e., Zinwell and Chenming Mold go up and down completely randomly.
Pair Corralation between Zinwell and Chenming Mold
Assuming the 90 days trading horizon Zinwell is expected to generate 0.54 times more return on investment than Chenming Mold. However, Zinwell is 1.85 times less risky than Chenming Mold. It trades about -0.11 of its potential returns per unit of risk. Chenming Mold Industrial is currently generating about -0.12 per unit of risk. If you would invest 1,775 in Zinwell on September 1, 2024 and sell it today you would lose (85.00) from holding Zinwell or give up 4.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Zinwell vs. Chenming Mold Industrial
Performance |
| Timeline |
| Zinwell |
| Chenming Mold Industrial |
Zinwell and Chenming Mold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zinwell and Chenming Mold
The main advantage of trading using opposite Zinwell and Chenming Mold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zinwell position performs unexpectedly, Chenming Mold 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 Chenming Mold will offset losses from the drop in Chenming Mold's long position.| Zinwell vs. Clevo Co | Zinwell vs. D Link Corp | Zinwell vs. Cheng Uei Precision | Zinwell vs. Senao International 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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