Correlation Between Zhen Ding and General Interface
Can any of the company-specific risk be diversified away by investing in both Zhen Ding and General Interface 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 General Interface 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 General Interface Solution, you can compare the effects of market volatilities on Zhen Ding and General Interface 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 General Interface. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhen Ding and General Interface.
Diversification Opportunities for Zhen Ding and General Interface
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Zhen and General is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Zhen Ding Technology and General Interface Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Interface 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 General Interface. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Interface has no effect on the direction of Zhen Ding i.e., Zhen Ding and General Interface go up and down completely randomly.
Pair Corralation between Zhen Ding and General Interface
Assuming the 90 days trading horizon Zhen Ding Technology is expected to generate 1.01 times more return on investment than General Interface. However, Zhen Ding is 1.01 times more volatile than General Interface Solution. It trades about 0.05 of its potential returns per unit of risk. General Interface Solution is currently generating about -0.33 per unit of risk. If you would invest 11,250 in Zhen Ding Technology on September 1, 2024 and sell it today you would earn a total of 200.00 from holding Zhen Ding Technology or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhen Ding Technology vs. General Interface Solution
Performance |
| Timeline |
| Zhen Ding Technology |
| General Interface |
Zhen Ding and General Interface Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhen Ding and General Interface
The main advantage of trading using opposite Zhen Ding and General Interface positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhen Ding position performs unexpectedly, General Interface 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 General Interface will offset losses from the drop in General Interface's long position.| Zhen Ding vs. Unimicron Technology Corp | Zhen Ding vs. Flexium Interconnect | Zhen Ding vs. Catcher Technology Co | Zhen Ding vs. Pegatron Corp |
| General Interface vs. Zhen Ding Technology | General Interface vs. TPK Holding Co | General Interface vs. Catcher Technology Co | General Interface 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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