Correlation Between Zhejiang Juhua and Guizhou Chanhen
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By analyzing existing cross correlation between Zhejiang Juhua Co and Guizhou Chanhen Chemical, you can compare the effects of market volatilities on Zhejiang Juhua and Guizhou Chanhen 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 Guizhou Chanhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Juhua and Guizhou Chanhen.
Diversification Opportunities for Zhejiang Juhua and Guizhou Chanhen
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Guizhou is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Juhua Co and Guizhou Chanhen Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guizhou Chanhen Chemical 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 Guizhou Chanhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guizhou Chanhen Chemical has no effect on the direction of Zhejiang Juhua i.e., Zhejiang Juhua and Guizhou Chanhen go up and down completely randomly.
Pair Corralation between Zhejiang Juhua and Guizhou Chanhen
Assuming the 90 days trading horizon Zhejiang Juhua Co is expected to generate 0.98 times more return on investment than Guizhou Chanhen. However, Zhejiang Juhua Co is 1.02 times less risky than Guizhou Chanhen. It trades about 0.07 of its potential returns per unit of risk. Guizhou Chanhen Chemical is currently generating about 0.03 per unit of risk. If you would invest 1,309 in Zhejiang Juhua Co on September 1, 2024 and sell it today you would earn a total of 928.00 from holding Zhejiang Juhua Co or generate 70.89% 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. Guizhou Chanhen Chemical
Performance |
| Timeline |
| Zhejiang Juhua |
| Guizhou Chanhen Chemical |
Zhejiang Juhua and Guizhou Chanhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Juhua and Guizhou Chanhen
The main advantage of trading using opposite Zhejiang Juhua and Guizhou Chanhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Juhua position performs unexpectedly, Guizhou Chanhen 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 Guizhou Chanhen will offset losses from the drop in Guizhou Chanhen's long position.| Zhejiang Juhua vs. Hunan Investment Group | Zhejiang Juhua vs. BTG Hotels Group | Zhejiang Juhua vs. Shenzhen Centralcon Investment | Zhejiang Juhua vs. Harbin Hatou Investment |
| Guizhou Chanhen vs. GKHT Medical Technology | Guizhou Chanhen vs. Shanghai Jinfeng Wine | Guizhou Chanhen vs. Guangdong Qunxing Toys | Guizhou Chanhen vs. Ningbo David Medical |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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