Correlation Between Zhen Ding and Azion
Can any of the company-specific risk be diversified away by investing in both Zhen Ding and Azion 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 Azion 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 Azion, you can compare the effects of market volatilities on Zhen Ding and Azion 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 Azion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhen Ding and Azion.
Diversification Opportunities for Zhen Ding and Azion
Very good diversification
The 3 months correlation between Zhen and Azion is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Zhen Ding Technology and Azion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azion 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 Azion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azion has no effect on the direction of Zhen Ding i.e., Zhen Ding and Azion go up and down completely randomly.
Pair Corralation between Zhen Ding and Azion
Assuming the 90 days trading horizon Zhen Ding Technology is expected to generate 0.6 times more return on investment than Azion. However, Zhen Ding Technology is 1.66 times less risky than Azion. It trades about 0.02 of its potential returns per unit of risk. Azion is currently generating about -0.02 per unit of risk. If you would invest 11,200 in Zhen Ding Technology on September 14, 2024 and sell it today you would earn a total of 550.00 from holding Zhen Ding Technology or generate 4.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Zhen Ding Technology vs. Azion
Performance |
| Timeline |
| Zhen Ding Technology |
| Azion |
Zhen Ding and Azion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhen Ding and Azion
The main advantage of trading using opposite Zhen Ding and Azion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhen Ding position performs unexpectedly, Azion 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 Azion will offset losses from the drop in Azion's long position.| Zhen Ding vs. AU Optronics | Zhen Ding vs. Innolux Corp | Zhen Ding vs. Ruentex Development Co | Zhen Ding vs. WiseChip Semiconductor |
| Azion vs. Phytohealth Corp | Azion vs. Cleanaway Co | Azion vs. Pacific Construction Co | Azion vs. Holiday Entertainment 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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