Correlation Between Shanxi Lanhua and Zotye Automobile
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By analyzing existing cross correlation between Shanxi Lanhua Sci Tech and Zotye Automobile Co, you can compare the effects of market volatilities on Shanxi Lanhua and Zotye Automobile 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 Shanxi Lanhua with a short position of Zotye Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanxi Lanhua and Zotye Automobile.
Diversification Opportunities for Shanxi Lanhua and Zotye Automobile
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanxi and Zotye is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Shanxi Lanhua Sci Tech and Zotye Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zotye Automobile and Shanxi Lanhua 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 Shanxi Lanhua Sci Tech are associated (or correlated) with Zotye Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zotye Automobile has no effect on the direction of Shanxi Lanhua i.e., Shanxi Lanhua and Zotye Automobile go up and down completely randomly.
Pair Corralation between Shanxi Lanhua and Zotye Automobile
Assuming the 90 days trading horizon Shanxi Lanhua Sci Tech is expected to generate 0.53 times more return on investment than Zotye Automobile. However, Shanxi Lanhua Sci Tech is 1.9 times less risky than Zotye Automobile. It trades about 0.0 of its potential returns per unit of risk. Zotye Automobile Co is currently generating about -0.02 per unit of risk. If you would invest 970.00 in Shanxi Lanhua Sci Tech on September 3, 2024 and sell it today you would lose (103.00) from holding Shanxi Lanhua Sci Tech or give up 10.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanxi Lanhua Sci Tech vs. Zotye Automobile Co
Performance |
| Timeline |
| Shanxi Lanhua Sci |
| Zotye Automobile |
Shanxi Lanhua and Zotye Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanxi Lanhua and Zotye Automobile
The main advantage of trading using opposite Shanxi Lanhua and Zotye Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanxi Lanhua position performs unexpectedly, Zotye Automobile 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 Zotye Automobile will offset losses from the drop in Zotye Automobile's long position.| Shanxi Lanhua vs. Gansu Jiu Steel | Shanxi Lanhua vs. Ming Yang Smart | Shanxi Lanhua vs. Aba Chemicals Corp | Shanxi Lanhua vs. Loctek Ergonomic Technology |
| Zotye Automobile vs. Xinjiang Baodi Mining | Zotye Automobile vs. Quectel Wireless Solutions | Zotye Automobile vs. Shanghai Metersbonwe FashionAccessories | Zotye Automobile vs. Pengxin International Mining |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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