Correlation Between Zhonghong Pulin and Digital China
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By analyzing existing cross correlation between Zhonghong Pulin Medical and Digital China Information, you can compare the effects of market volatilities on Zhonghong Pulin and Digital China 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 Zhonghong Pulin with a short position of Digital China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhonghong Pulin and Digital China.
Diversification Opportunities for Zhonghong Pulin and Digital China
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zhonghong and Digital is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Zhonghong Pulin Medical and Digital China Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital China Information and Zhonghong Pulin 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 Zhonghong Pulin Medical are associated (or correlated) with Digital China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital China Information has no effect on the direction of Zhonghong Pulin i.e., Zhonghong Pulin and Digital China go up and down completely randomly.
Pair Corralation between Zhonghong Pulin and Digital China
Assuming the 90 days trading horizon Zhonghong Pulin Medical is expected to under-perform the Digital China. But the stock apears to be less risky and, when comparing its historical volatility, Zhonghong Pulin Medical is 1.55 times less risky than Digital China. The stock trades about -0.31 of its potential returns per unit of risk. The Digital China Information is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 1,195 in Digital China Information on October 28, 2024 and sell it today you would lose (99.00) from holding Digital China Information or give up 8.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhonghong Pulin Medical vs. Digital China Information
Performance |
| Timeline |
| Zhonghong Pulin Medical |
| Digital China Information |
Zhonghong Pulin and Digital China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhonghong Pulin and Digital China
The main advantage of trading using opposite Zhonghong Pulin and Digital China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhonghong Pulin position performs unexpectedly, Digital China 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 Digital China will offset losses from the drop in Digital China's long position.| Zhonghong Pulin vs. Agricultural Bank of | Zhonghong Pulin vs. Industrial and Commercial | Zhonghong Pulin vs. Bank of China | Zhonghong Pulin vs. China Construction Bank |
| Digital China vs. Shanghai Construction Group | Digital China vs. Zhejiang Construction Investment | Digital China vs. Tjk Machinery Tianjin | Digital China vs. Sportsoul Co Ltd |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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