Correlation Between Zhejiang Zhengguang and Heilongjiang Transport
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By analyzing existing cross correlation between Zhejiang Zhengguang Industrial and Heilongjiang Transport Development, you can compare the effects of market volatilities on Zhejiang Zhengguang and Heilongjiang Transport 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 Zhejiang Zhengguang with a short position of Heilongjiang Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Zhengguang and Heilongjiang Transport.
Diversification Opportunities for Zhejiang Zhengguang and Heilongjiang Transport
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and Heilongjiang is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Zhengguang Industrial and Heilongjiang Transport Develop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heilongjiang Transport and Zhejiang Zhengguang 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 Zhejiang Zhengguang Industrial are associated (or correlated) with Heilongjiang Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heilongjiang Transport has no effect on the direction of Zhejiang Zhengguang i.e., Zhejiang Zhengguang and Heilongjiang Transport go up and down completely randomly.
Pair Corralation between Zhejiang Zhengguang and Heilongjiang Transport
Assuming the 90 days trading horizon Zhejiang Zhengguang Industrial is expected to generate 0.9 times more return on investment than Heilongjiang Transport. However, Zhejiang Zhengguang Industrial is 1.11 times less risky than Heilongjiang Transport. It trades about -0.08 of its potential returns per unit of risk. Heilongjiang Transport Development is currently generating about -0.13 per unit of risk. If you would invest 2,388 in Zhejiang Zhengguang Industrial on October 26, 2024 and sell it today you would lose (74.00) from holding Zhejiang Zhengguang Industrial or give up 3.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Zhengguang Industrial vs. Heilongjiang Transport Develop
Performance |
| Timeline |
| Zhejiang Zhengguang |
| Heilongjiang Transport |
Zhejiang Zhengguang and Heilongjiang Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Zhengguang and Heilongjiang Transport
The main advantage of trading using opposite Zhejiang Zhengguang and Heilongjiang Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Zhengguang position performs unexpectedly, Heilongjiang Transport 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 Heilongjiang Transport will offset losses from the drop in Heilongjiang Transport's long position.| Zhejiang Zhengguang vs. Zijin Mining Group | Zhejiang Zhengguang vs. Wanhua Chemical Group | Zhejiang Zhengguang vs. Baoshan Iron Steel | Zhejiang Zhengguang vs. Shandong Gold Mining |
| Heilongjiang Transport vs. PetroChina Co Ltd | Heilongjiang Transport vs. China Mobile Limited | Heilongjiang Transport vs. CNOOC Limited | Heilongjiang Transport vs. Ping An Insurance |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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