Correlation Between China Sports and Zotye Automobile
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By analyzing existing cross correlation between China Sports Industry and Zotye Automobile Co, you can compare the effects of market volatilities on China Sports 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 China Sports with a short position of Zotye Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Sports and Zotye Automobile.
Diversification Opportunities for China Sports and Zotye Automobile
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Zotye is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding China Sports Industry and Zotye Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zotye Automobile and China Sports 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 China Sports Industry 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 China Sports i.e., China Sports and Zotye Automobile go up and down completely randomly.
Pair Corralation between China Sports and Zotye Automobile
Assuming the 90 days trading horizon China Sports Industry is expected to generate 0.76 times more return on investment than Zotye Automobile. However, China Sports Industry is 1.32 times less risky than Zotye Automobile. It trades about -0.21 of its potential returns per unit of risk. Zotye Automobile Co is currently generating about -0.33 per unit of risk. If you would invest 891.00 in China Sports Industry on October 12, 2024 and sell it today you would lose (133.00) from holding China Sports Industry or give up 14.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Sports Industry vs. Zotye Automobile Co
Performance |
| Timeline |
| China Sports Industry |
| Zotye Automobile |
China Sports and Zotye Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Sports and Zotye Automobile
The main advantage of trading using opposite China Sports and Zotye Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Sports 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.| China Sports vs. Sanbo Hospital Management | China Sports vs. Goodwill E Health | China Sports vs. Heren Health Co | China Sports vs. Sinofibers Technology Co |
| Zotye Automobile vs. China Sports Industry | Zotye Automobile vs. Elite Color Environmental | Zotye Automobile vs. Gansu Jiu Steel | Zotye Automobile vs. Eit Environmental Development |
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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