Correlation Between Chengdu Kanghua and Zoje Resources
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By analyzing existing cross correlation between Chengdu Kanghua Biological and Zoje Resources Investment, you can compare the effects of market volatilities on Chengdu Kanghua and Zoje Resources 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 Chengdu Kanghua with a short position of Zoje Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and Zoje Resources.
Diversification Opportunities for Chengdu Kanghua and Zoje Resources
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chengdu and Zoje is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and Zoje Resources Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoje Resources Investment and Chengdu Kanghua 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 Chengdu Kanghua Biological are associated (or correlated) with Zoje Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoje Resources Investment has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and Zoje Resources go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and Zoje Resources
Assuming the 90 days trading horizon Chengdu Kanghua is expected to generate 3.5 times less return on investment than Zoje Resources. In addition to that, Chengdu Kanghua is 1.01 times more volatile than Zoje Resources Investment. It trades about 0.03 of its total potential returns per unit of risk. Zoje Resources Investment is currently generating about 0.09 per unit of volatility. If you would invest 197.00 in Zoje Resources Investment on September 4, 2024 and sell it today you would earn a total of 75.00 from holding Zoje Resources Investment or generate 38.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Kanghua Biological vs. Zoje Resources Investment
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| Zoje Resources Investment |
Chengdu Kanghua and Zoje Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and Zoje Resources
The main advantage of trading using opposite Chengdu Kanghua and Zoje Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, Zoje Resources 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 Zoje Resources will offset losses from the drop in Zoje Resources' long position.| Chengdu Kanghua vs. Sichuan Fulin Transportation | Chengdu Kanghua vs. Dazhong Transportation Group | Chengdu Kanghua vs. Sportsoul Co Ltd | Chengdu Kanghua vs. Sichuan Teway Food |
| Zoje Resources vs. Chengdu Kanghua Biological | Zoje Resources vs. Beijing Wantai Biological | Zoje Resources vs. Suzhou Novoprotein Scientific | Zoje Resources vs. Aluminum Corp of |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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