Correlation Between Inner Mongolia and Zhejiang Satellite
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By analyzing existing cross correlation between Inner Mongolia BaoTou and Zhejiang Satellite Petrochemical, you can compare the effects of market volatilities on Inner Mongolia and Zhejiang Satellite 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 Inner Mongolia with a short position of Zhejiang Satellite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inner Mongolia and Zhejiang Satellite.
Diversification Opportunities for Inner Mongolia and Zhejiang Satellite
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Inner and Zhejiang is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Inner Mongolia BaoTou and Zhejiang Satellite Petrochemic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Satellite and Inner Mongolia 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 Inner Mongolia BaoTou are associated (or correlated) with Zhejiang Satellite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Satellite has no effect on the direction of Inner Mongolia i.e., Inner Mongolia and Zhejiang Satellite go up and down completely randomly.
Pair Corralation between Inner Mongolia and Zhejiang Satellite
Assuming the 90 days trading horizon Inner Mongolia is expected to generate 9.89 times less return on investment than Zhejiang Satellite. But when comparing it to its historical volatility, Inner Mongolia BaoTou is 1.18 times less risky than Zhejiang Satellite. It trades about 0.0 of its potential returns per unit of risk. Zhejiang Satellite Petrochemical is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,538 in Zhejiang Satellite Petrochemical on August 30, 2024 and sell it today you would earn a total of 251.00 from holding Zhejiang Satellite Petrochemical or generate 16.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inner Mongolia BaoTou vs. Zhejiang Satellite Petrochemic
Performance |
| Timeline |
| Inner Mongolia BaoTou |
| Zhejiang Satellite |
Inner Mongolia and Zhejiang Satellite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inner Mongolia and Zhejiang Satellite
The main advantage of trading using opposite Inner Mongolia and Zhejiang Satellite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inner Mongolia position performs unexpectedly, Zhejiang Satellite 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 Zhejiang Satellite will offset losses from the drop in Zhejiang Satellite's long position.| Inner Mongolia vs. Union Semiconductor Co | Inner Mongolia vs. Shuhua Sports Co | Inner Mongolia vs. Semiconductor Manufacturing Electronics | Inner Mongolia vs. Anhui Transport Consulting |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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