Correlation Between Zhejiang Juhua and Guangzhou Tinci
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By analyzing existing cross correlation between Zhejiang Juhua Co and Guangzhou Tinci Materials, you can compare the effects of market volatilities on Zhejiang Juhua and Guangzhou Tinci 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 Guangzhou Tinci. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Juhua and Guangzhou Tinci.
Diversification Opportunities for Zhejiang Juhua and Guangzhou Tinci
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Guangzhou is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Juhua Co and Guangzhou Tinci Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Tinci Materials 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 Guangzhou Tinci. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Tinci Materials has no effect on the direction of Zhejiang Juhua i.e., Zhejiang Juhua and Guangzhou Tinci go up and down completely randomly.
Pair Corralation between Zhejiang Juhua and Guangzhou Tinci
Assuming the 90 days trading horizon Zhejiang Juhua is expected to generate 87.15 times less return on investment than Guangzhou Tinci. But when comparing it to its historical volatility, Zhejiang Juhua Co is 2.09 times less risky than Guangzhou Tinci. It trades about 0.01 of its potential returns per unit of risk. Guangzhou Tinci Materials is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,875 in Guangzhou Tinci Materials on August 27, 2024 and sell it today you would earn a total of 503.00 from holding Guangzhou Tinci Materials or generate 26.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Juhua Co vs. Guangzhou Tinci Materials
Performance |
| Timeline |
| Zhejiang Juhua |
| Guangzhou Tinci Materials |
Zhejiang Juhua and Guangzhou Tinci Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Juhua and Guangzhou Tinci
The main advantage of trading using opposite Zhejiang Juhua and Guangzhou Tinci positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Juhua position performs unexpectedly, Guangzhou Tinci 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 Guangzhou Tinci will offset losses from the drop in Guangzhou Tinci's long position.| Zhejiang Juhua vs. Zijin Mining Group | Zhejiang Juhua vs. Wanhua Chemical Group | Zhejiang Juhua vs. Baoshan Iron Steel | Zhejiang Juhua vs. Shandong Gold Mining |
| Guangzhou Tinci vs. Zijin Mining Group | Guangzhou Tinci vs. Wanhua Chemical Group | Guangzhou Tinci vs. Baoshan Iron Steel | Guangzhou Tinci 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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