Correlation Between Weihai Honglin and Zoje Resources
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By analyzing existing cross correlation between Weihai Honglin Electronic and Zoje Resources Investment, you can compare the effects of market volatilities on Weihai Honglin and Zoje Resources 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 Weihai Honglin with a short position of Zoje Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weihai Honglin and Zoje Resources.
Diversification Opportunities for Weihai Honglin and Zoje Resources
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Weihai and Zoje is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Weihai Honglin Electronic and Zoje Resources Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoje Resources Investment and Weihai Honglin 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 Weihai Honglin Electronic are associated (or correlated) with Zoje Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoje Resources Investment has no effect on the direction of Weihai Honglin i.e., Weihai Honglin and Zoje Resources go up and down completely randomly.
Pair Corralation between Weihai Honglin and Zoje Resources
Assuming the 90 days trading horizon Weihai Honglin Electronic is expected to under-perform the Zoje Resources. But the stock apears to be less risky and, when comparing its historical volatility, Weihai Honglin Electronic is 2.34 times less risky than Zoje Resources. The stock trades about -0.18 of its potential returns per unit of risk. The Zoje Resources Investment is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 224.00 in Zoje Resources Investment on August 29, 2024 and sell it today you would earn a total of 16.00 from holding Zoje Resources Investment or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weihai Honglin Electronic vs. Zoje Resources Investment
Performance |
| Timeline |
| Weihai Honglin Electronic |
| Zoje Resources Investment |
Weihai Honglin and Zoje Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weihai Honglin and Zoje Resources
The main advantage of trading using opposite Weihai Honglin and Zoje Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weihai Honglin position performs unexpectedly, Zoje Resources 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 Zoje Resources will offset losses from the drop in Zoje Resources' long position.| Weihai Honglin vs. Kweichow Moutai Co | Weihai Honglin vs. Shenzhen Mindray Bio Medical | Weihai Honglin vs. Jiangsu Pacific Quartz | Weihai Honglin vs. G bits Network Technology |
| Zoje Resources vs. Biwin Storage Technology | Zoje Resources vs. PetroChina Co Ltd | Zoje Resources vs. Industrial and Commercial | Zoje Resources vs. China Construction Bank |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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