Correlation Between Zhejiang Yayi and Hunan Mendale
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By analyzing existing cross correlation between Zhejiang Yayi Metal and Hunan Mendale Hometextile, you can compare the effects of market volatilities on Zhejiang Yayi and Hunan Mendale 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 Yayi with a short position of Hunan Mendale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Yayi and Hunan Mendale.
Diversification Opportunities for Zhejiang Yayi and Hunan Mendale
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Hunan is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Yayi Metal and Hunan Mendale Hometextile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Mendale Hometextile and Zhejiang Yayi 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 Yayi Metal are associated (or correlated) with Hunan Mendale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Mendale Hometextile has no effect on the direction of Zhejiang Yayi i.e., Zhejiang Yayi and Hunan Mendale go up and down completely randomly.
Pair Corralation between Zhejiang Yayi and Hunan Mendale
Assuming the 90 days trading horizon Zhejiang Yayi Metal is expected to generate 0.9 times more return on investment than Hunan Mendale. However, Zhejiang Yayi Metal is 1.12 times less risky than Hunan Mendale. It trades about -0.09 of its potential returns per unit of risk. Hunan Mendale Hometextile is currently generating about -0.15 per unit of risk. If you would invest 2,605 in Zhejiang Yayi Metal on September 28, 2024 and sell it today you would lose (224.00) from holding Zhejiang Yayi Metal or give up 8.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Yayi Metal vs. Hunan Mendale Hometextile
Performance |
| Timeline |
| Zhejiang Yayi Metal |
| Hunan Mendale Hometextile |
Zhejiang Yayi and Hunan Mendale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Yayi and Hunan Mendale
The main advantage of trading using opposite Zhejiang Yayi and Hunan Mendale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Yayi position performs unexpectedly, Hunan Mendale 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 Hunan Mendale will offset losses from the drop in Hunan Mendale's long position.| Zhejiang Yayi vs. Agricultural Bank of | Zhejiang Yayi vs. Industrial and Commercial | Zhejiang Yayi vs. Bank of China | Zhejiang Yayi vs. China Construction Bank |
| Hunan Mendale vs. Cambricon Technologies Corp | Hunan Mendale vs. Loongson Technology Corp | Hunan Mendale vs. Shenzhen Fortune Trend | Hunan Mendale vs. Chongqing Road Bridge |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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