Correlation Between Zhejiang Yayi and Beijing Quanshi
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By analyzing existing cross correlation between Zhejiang Yayi Metal and Beijing Quanshi World, you can compare the effects of market volatilities on Zhejiang Yayi and Beijing Quanshi 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 Beijing Quanshi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Yayi and Beijing Quanshi.
Diversification Opportunities for Zhejiang Yayi and Beijing Quanshi
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Zhejiang and Beijing is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Yayi Metal and Beijing Quanshi World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Quanshi World 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 Beijing Quanshi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Quanshi World has no effect on the direction of Zhejiang Yayi i.e., Zhejiang Yayi and Beijing Quanshi go up and down completely randomly.
Pair Corralation between Zhejiang Yayi and Beijing Quanshi
Assuming the 90 days trading horizon Zhejiang Yayi is expected to generate 1.53 times less return on investment than Beijing Quanshi. But when comparing it to its historical volatility, Zhejiang Yayi Metal is 1.09 times less risky than Beijing Quanshi. It trades about 0.01 of its potential returns per unit of risk. Beijing Quanshi World is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,755 in Beijing Quanshi World on September 14, 2024 and sell it today you would lose (308.00) from holding Beijing Quanshi World or give up 11.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Yayi Metal vs. Beijing Quanshi World
Performance |
| Timeline |
| Zhejiang Yayi Metal |
| Beijing Quanshi World |
Zhejiang Yayi and Beijing Quanshi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Yayi and Beijing Quanshi
The main advantage of trading using opposite Zhejiang Yayi and Beijing Quanshi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Yayi position performs unexpectedly, Beijing Quanshi 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 Beijing Quanshi will offset losses from the drop in Beijing Quanshi's long position.| Zhejiang Yayi vs. Lutian Machinery Co | Zhejiang Yayi vs. China Longyuan Power | Zhejiang Yayi vs. PetroChina Co Ltd | Zhejiang Yayi vs. Bank of China |
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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