Correlation Between Panda Dairy and Zhongtong Guomai
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By analyzing existing cross correlation between Panda Dairy Corp and Zhongtong Guomai Communication, you can compare the effects of market volatilities on Panda Dairy and Zhongtong Guomai 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 Panda Dairy with a short position of Zhongtong Guomai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panda Dairy and Zhongtong Guomai.
Diversification Opportunities for Panda Dairy and Zhongtong Guomai
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Panda and Zhongtong is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Panda Dairy Corp and Zhongtong Guomai Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongtong Guomai Com and Panda Dairy 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 Panda Dairy Corp are associated (or correlated) with Zhongtong Guomai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongtong Guomai Com has no effect on the direction of Panda Dairy i.e., Panda Dairy and Zhongtong Guomai go up and down completely randomly.
Pair Corralation between Panda Dairy and Zhongtong Guomai
Assuming the 90 days trading horizon Panda Dairy is expected to generate 1.45 times less return on investment than Zhongtong Guomai. In addition to that, Panda Dairy is 1.06 times more volatile than Zhongtong Guomai Communication. It trades about 0.04 of its total potential returns per unit of risk. Zhongtong Guomai Communication is currently generating about 0.07 per unit of volatility. If you would invest 614.00 in Zhongtong Guomai Communication on September 12, 2024 and sell it today you would earn a total of 517.00 from holding Zhongtong Guomai Communication or generate 84.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Panda Dairy Corp vs. Zhongtong Guomai Communication
Performance |
| Timeline |
| Panda Dairy Corp |
| Zhongtong Guomai Com |
Panda Dairy and Zhongtong Guomai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panda Dairy and Zhongtong Guomai
The main advantage of trading using opposite Panda Dairy and Zhongtong Guomai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panda Dairy position performs unexpectedly, Zhongtong Guomai 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 Zhongtong Guomai will offset losses from the drop in Zhongtong Guomai's long position.| Panda Dairy vs. China Petroleum Chemical | Panda Dairy vs. PetroChina Co Ltd | Panda Dairy vs. China State Construction | Panda Dairy vs. China Railway Group |
| Zhongtong Guomai vs. Gansu Jiu Steel | Zhongtong Guomai vs. Shandong Mining Machinery | Zhongtong Guomai vs. Aba Chemicals Corp | Zhongtong Guomai vs. BlueFocus Communication Group |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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