Correlation Between Chenming Mold and Zinwell
Can any of the company-specific risk be diversified away by investing in both Chenming Mold and Zinwell at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Chenming Mold and Zinwell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chenming Mold Industrial and Zinwell, you can compare the effects of market volatilities on Chenming Mold and Zinwell 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 Chenming Mold with a short position of Zinwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chenming Mold and Zinwell.
Diversification Opportunities for Chenming Mold and Zinwell
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chenming and Zinwell is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Chenming Mold Industrial and Zinwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinwell and Chenming Mold 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 Chenming Mold Industrial are associated (or correlated) with Zinwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinwell has no effect on the direction of Chenming Mold i.e., Chenming Mold and Zinwell go up and down completely randomly.
Pair Corralation between Chenming Mold and Zinwell
Assuming the 90 days trading horizon Chenming Mold Industrial is expected to under-perform the Zinwell. In addition to that, Chenming Mold is 1.85 times more volatile than Zinwell. It trades about -0.12 of its total potential returns per unit of risk. Zinwell is currently generating about -0.11 per unit of volatility. If you would invest 1,775 in Zinwell on September 1, 2024 and sell it today you would lose (85.00) from holding Zinwell or give up 4.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Chenming Mold Industrial vs. Zinwell
Performance |
| Timeline |
| Chenming Mold Industrial |
| Zinwell |
Chenming Mold and Zinwell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chenming Mold and Zinwell
The main advantage of trading using opposite Chenming Mold and Zinwell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chenming Mold position performs unexpectedly, Zinwell 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 Zinwell will offset losses from the drop in Zinwell's long position.The idea behind Chenming Mold Industrial and Zinwell pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Zinwell vs. Clevo Co | Zinwell vs. D Link Corp | Zinwell vs. Cheng Uei Precision | Zinwell vs. Senao International Co |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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