Correlation Between Zhejiang Juhua and Xinxiang Chemical
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By analyzing existing cross correlation between Zhejiang Juhua Co and Xinxiang Chemical Fiber, you can compare the effects of market volatilities on Zhejiang Juhua and Xinxiang Chemical 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 Zhejiang Juhua with a short position of Xinxiang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Juhua and Xinxiang Chemical.
Diversification Opportunities for Zhejiang Juhua and Xinxiang Chemical
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and Xinxiang is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Juhua Co and Xinxiang Chemical Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinxiang Chemical Fiber and Zhejiang Juhua 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 Zhejiang Juhua Co are associated (or correlated) with Xinxiang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinxiang Chemical Fiber has no effect on the direction of Zhejiang Juhua i.e., Zhejiang Juhua and Xinxiang Chemical go up and down completely randomly.
Pair Corralation between Zhejiang Juhua and Xinxiang Chemical
Assuming the 90 days trading horizon Zhejiang Juhua is expected to generate 23.25 times less return on investment than Xinxiang Chemical. But when comparing it to its historical volatility, Zhejiang Juhua Co is 2.23 times less risky than Xinxiang Chemical. It trades about 0.02 of its potential returns per unit of risk. Xinxiang Chemical Fiber is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 378.00 in Xinxiang Chemical Fiber on September 15, 2024 and sell it today you would earn a total of 76.00 from holding Xinxiang Chemical Fiber or generate 20.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Juhua Co vs. Xinxiang Chemical Fiber
Performance |
| Timeline |
| Zhejiang Juhua |
| Xinxiang Chemical Fiber |
Zhejiang Juhua and Xinxiang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Juhua and Xinxiang Chemical
The main advantage of trading using opposite Zhejiang Juhua and Xinxiang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Juhua position performs unexpectedly, Xinxiang Chemical 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 Xinxiang Chemical will offset losses from the drop in Xinxiang Chemical's long position.| Zhejiang Juhua vs. Zoy Home Furnishing | Zhejiang Juhua vs. Yonyou Auto Information | Zhejiang Juhua vs. Zhangjiagang Elegant Home | Zhejiang Juhua vs. Xiamen Goldenhome Co |
| Xinxiang Chemical vs. Zijin Mining Group | Xinxiang Chemical vs. Wanhua Chemical Group | Xinxiang Chemical vs. Baoshan Iron Steel | Xinxiang Chemical vs. Shandong Gold 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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