Correlation Between Sinofibers Technology and Zhongzhu Medical
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By analyzing existing cross correlation between Sinofibers Technology Co and Zhongzhu Medical Holdings, you can compare the effects of market volatilities on Sinofibers Technology and Zhongzhu Medical 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 Sinofibers Technology with a short position of Zhongzhu Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinofibers Technology and Zhongzhu Medical.
Diversification Opportunities for Sinofibers Technology and Zhongzhu Medical
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sinofibers and Zhongzhu is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sinofibers Technology Co and Zhongzhu Medical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongzhu Medical Holdings and Sinofibers Technology 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 Sinofibers Technology Co are associated (or correlated) with Zhongzhu Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongzhu Medical Holdings has no effect on the direction of Sinofibers Technology i.e., Sinofibers Technology and Zhongzhu Medical go up and down completely randomly.
Pair Corralation between Sinofibers Technology and Zhongzhu Medical
Assuming the 90 days trading horizon Sinofibers Technology Co is expected to under-perform the Zhongzhu Medical. In addition to that, Sinofibers Technology is 1.39 times more volatile than Zhongzhu Medical Holdings. It trades about -0.03 of its total potential returns per unit of risk. Zhongzhu Medical Holdings is currently generating about -0.03 per unit of volatility. If you would invest 187.00 in Zhongzhu Medical Holdings on October 27, 2024 and sell it today you would lose (61.00) from holding Zhongzhu Medical Holdings or give up 32.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinofibers Technology Co vs. Zhongzhu Medical Holdings
Performance |
| Timeline |
| Sinofibers Technology |
| Zhongzhu Medical Holdings |
Sinofibers Technology and Zhongzhu Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinofibers Technology and Zhongzhu Medical
The main advantage of trading using opposite Sinofibers Technology and Zhongzhu Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinofibers Technology position performs unexpectedly, Zhongzhu Medical 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 Zhongzhu Medical will offset losses from the drop in Zhongzhu Medical's long position.The idea behind Sinofibers Technology Co and Zhongzhu Medical Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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