Correlation Between Guangdong Wens and Zhejiang Yinlun
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By analyzing existing cross correlation between Guangdong Wens Foodstuff and Zhejiang Yinlun Machinery, you can compare the effects of market volatilities on Guangdong Wens and Zhejiang Yinlun 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 Guangdong Wens with a short position of Zhejiang Yinlun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Wens and Zhejiang Yinlun.
Diversification Opportunities for Guangdong Wens and Zhejiang Yinlun
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guangdong and Zhejiang is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Wens Foodstuff and Zhejiang Yinlun Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Yinlun Machinery and Guangdong Wens 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 Guangdong Wens Foodstuff are associated (or correlated) with Zhejiang Yinlun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Yinlun Machinery has no effect on the direction of Guangdong Wens i.e., Guangdong Wens and Zhejiang Yinlun go up and down completely randomly.
Pair Corralation between Guangdong Wens and Zhejiang Yinlun
Assuming the 90 days trading horizon Guangdong Wens Foodstuff is expected to under-perform the Zhejiang Yinlun. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Wens Foodstuff is 1.75 times less risky than Zhejiang Yinlun. The stock trades about -0.2 of its potential returns per unit of risk. The Zhejiang Yinlun Machinery is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,995 in Zhejiang Yinlun Machinery on November 6, 2024 and sell it today you would earn a total of 21.00 from holding Zhejiang Yinlun Machinery or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Wens Foodstuff vs. Zhejiang Yinlun Machinery
Performance |
| Timeline |
| Guangdong Wens Foodstuff |
| Zhejiang Yinlun Machinery |
Guangdong Wens and Zhejiang Yinlun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Wens and Zhejiang Yinlun
The main advantage of trading using opposite Guangdong Wens and Zhejiang Yinlun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Wens position performs unexpectedly, Zhejiang Yinlun 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 Yinlun will offset losses from the drop in Zhejiang Yinlun's long position.| Guangdong Wens vs. Jahen Household Products | Guangdong Wens vs. Jointo Energy Investment | Guangdong Wens vs. Newcapec Electronics Co | Guangdong Wens vs. Anhui Deli Household |
| Zhejiang Yinlun vs. Fujian Oriental Silver | Zhejiang Yinlun vs. Offshore Oil Engineering | Zhejiang Yinlun vs. Bosera CMSK Industrial | Zhejiang Yinlun vs. Ningbo Fujia Industrial |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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