Correlation Between Zhen Ding and Global Lighting
Can any of the company-specific risk be diversified away by investing in both Zhen Ding and Global Lighting 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 Zhen Ding and Global Lighting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zhen Ding Technology and Global Lighting Technologies, you can compare the effects of market volatilities on Zhen Ding and Global Lighting 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 Zhen Ding with a short position of Global Lighting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhen Ding and Global Lighting.
Diversification Opportunities for Zhen Ding and Global Lighting
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zhen and Global is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Zhen Ding Technology and Global Lighting Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Lighting Tech and Zhen Ding 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 Zhen Ding Technology are associated (or correlated) with Global Lighting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Lighting Tech has no effect on the direction of Zhen Ding i.e., Zhen Ding and Global Lighting go up and down completely randomly.
Pair Corralation between Zhen Ding and Global Lighting
Assuming the 90 days trading horizon Zhen Ding Technology is expected to generate 0.79 times more return on investment than Global Lighting. However, Zhen Ding Technology is 1.27 times less risky than Global Lighting. It trades about 0.03 of its potential returns per unit of risk. Global Lighting Technologies is currently generating about -0.15 per unit of risk. If you would invest 11,300 in Zhen Ding Technology on September 3, 2024 and sell it today you would earn a total of 150.00 from holding Zhen Ding Technology or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhen Ding Technology vs. Global Lighting Technologies
Performance |
| Timeline |
| Zhen Ding Technology |
| Global Lighting Tech |
Zhen Ding and Global Lighting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhen Ding and Global Lighting
The main advantage of trading using opposite Zhen Ding and Global Lighting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhen Ding position performs unexpectedly, Global Lighting 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 Global Lighting will offset losses from the drop in Global Lighting's long position.| Zhen Ding vs. Taiwan Semiconductor Manufacturing | Zhen Ding vs. Yang Ming Marine | Zhen Ding vs. ASE Industrial Holding | Zhen Ding vs. AU Optronics |
| Global Lighting vs. Arcadyan Technology Corp | Global Lighting vs. Zhen Ding Technology | Global Lighting vs. Taiwan Surface Mounting | Global Lighting vs. Flexium Interconnect |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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