Correlation Between State Grid and Zhejiang Dahua
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By analyzing existing cross correlation between State Grid InformationCommunication and Zhejiang Dahua Technology, you can compare the effects of market volatilities on State Grid and Zhejiang Dahua 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 State Grid with a short position of Zhejiang Dahua. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Grid and Zhejiang Dahua.
Diversification Opportunities for State Grid and Zhejiang Dahua
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between State and Zhejiang is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding State Grid InformationCommunic and Zhejiang Dahua Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Dahua Technology and State Grid 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 State Grid InformationCommunication are associated (or correlated) with Zhejiang Dahua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Dahua Technology has no effect on the direction of State Grid i.e., State Grid and Zhejiang Dahua go up and down completely randomly.
Pair Corralation between State Grid and Zhejiang Dahua
Assuming the 90 days trading horizon State Grid InformationCommunication is expected to generate 1.22 times more return on investment than Zhejiang Dahua. However, State Grid is 1.22 times more volatile than Zhejiang Dahua Technology. It trades about 0.06 of its potential returns per unit of risk. Zhejiang Dahua Technology is currently generating about -0.03 per unit of risk. If you would invest 1,559 in State Grid InformationCommunication on September 4, 2024 and sell it today you would earn a total of 656.00 from holding State Grid InformationCommunication or generate 42.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Grid InformationCommunic vs. Zhejiang Dahua Technology
Performance |
| Timeline |
| State Grid Informati |
| Zhejiang Dahua Technology |
State Grid and Zhejiang Dahua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Grid and Zhejiang Dahua
The main advantage of trading using opposite State Grid and Zhejiang Dahua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Grid position performs unexpectedly, Zhejiang Dahua 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 Dahua will offset losses from the drop in Zhejiang Dahua's long position.| State Grid vs. Industrial and Commercial | State Grid vs. China Construction Bank | State Grid vs. Bank of China | State Grid vs. Agricultural Bank of |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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