Correlation Between ZongTai Real and Carnival Industrial
Can any of the company-specific risk be diversified away by investing in both ZongTai Real and Carnival Industrial 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 ZongTai Real and Carnival Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZongTai Real Estate and Carnival Industrial Corp, you can compare the effects of market volatilities on ZongTai Real and Carnival Industrial 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 ZongTai Real with a short position of Carnival Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZongTai Real and Carnival Industrial.
Diversification Opportunities for ZongTai Real and Carnival Industrial
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ZongTai and Carnival is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding ZongTai Real Estate and Carnival Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnival Industrial Corp and ZongTai Real 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 ZongTai Real Estate are associated (or correlated) with Carnival Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnival Industrial Corp has no effect on the direction of ZongTai Real i.e., ZongTai Real and Carnival Industrial go up and down completely randomly.
Pair Corralation between ZongTai Real and Carnival Industrial
Assuming the 90 days trading horizon ZongTai Real Estate is expected to generate 3.34 times more return on investment than Carnival Industrial. However, ZongTai Real is 3.34 times more volatile than Carnival Industrial Corp. It trades about 0.18 of its potential returns per unit of risk. Carnival Industrial Corp is currently generating about -0.25 per unit of risk. If you would invest 3,230 in ZongTai Real Estate on September 2, 2024 and sell it today you would earn a total of 205.00 from holding ZongTai Real Estate or generate 6.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZongTai Real Estate vs. Carnival Industrial Corp
Performance |
| Timeline |
| ZongTai Real Estate |
| Carnival Industrial Corp |
ZongTai Real and Carnival Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZongTai Real and Carnival Industrial
The main advantage of trading using opposite ZongTai Real and Carnival Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZongTai Real position performs unexpectedly, Carnival Industrial 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 Carnival Industrial will offset losses from the drop in Carnival Industrial's long position.| ZongTai Real vs. Hunya Foods Co | ZongTai Real vs. Standard Foods Corp | ZongTai Real vs. First Insurance Co | ZongTai Real vs. Kao Fong Machinery |
| Carnival Industrial vs. China Times Publishing | Carnival Industrial vs. Far EasTone Telecommunications | Carnival Industrial vs. Cameo Communications | Carnival Industrial vs. WinMate Communication INC |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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