Correlation Between Zhejiang Juhua and Guangdong Sanhe
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By analyzing existing cross correlation between Zhejiang Juhua Co and Guangdong Sanhe Pile, you can compare the effects of market volatilities on Zhejiang Juhua and Guangdong Sanhe 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 Guangdong Sanhe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Juhua and Guangdong Sanhe.
Diversification Opportunities for Zhejiang Juhua and Guangdong Sanhe
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Zhejiang and Guangdong is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Juhua Co and Guangdong Sanhe Pile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Sanhe Pile 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 Guangdong Sanhe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Sanhe Pile has no effect on the direction of Zhejiang Juhua i.e., Zhejiang Juhua and Guangdong Sanhe go up and down completely randomly.
Pair Corralation between Zhejiang Juhua and Guangdong Sanhe
Assuming the 90 days trading horizon Zhejiang Juhua Co is expected to generate 0.9 times more return on investment than Guangdong Sanhe. However, Zhejiang Juhua Co is 1.11 times less risky than Guangdong Sanhe. It trades about 0.06 of its potential returns per unit of risk. Guangdong Sanhe Pile is currently generating about -0.04 per unit of risk. If you would invest 1,526 in Zhejiang Juhua Co on September 12, 2024 and sell it today you would earn a total of 755.00 from holding Zhejiang Juhua Co or generate 49.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.71% |
| Values | Daily Returns |
Zhejiang Juhua Co vs. Guangdong Sanhe Pile
Performance |
| Timeline |
| Zhejiang Juhua |
| Guangdong Sanhe Pile |
Zhejiang Juhua and Guangdong Sanhe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Juhua and Guangdong Sanhe
The main advantage of trading using opposite Zhejiang Juhua and Guangdong Sanhe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Juhua position performs unexpectedly, Guangdong Sanhe 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 Guangdong Sanhe will offset losses from the drop in Guangdong Sanhe's long position.| Zhejiang Juhua vs. Western Mining Co | Zhejiang Juhua vs. New Hope Dairy | Zhejiang Juhua vs. Jiangxi Naipu Mining | Zhejiang Juhua vs. Shandong Mining Machinery |
| Guangdong Sanhe vs. North Huajin Chemical | Guangdong Sanhe vs. Guangzhou Jointas Chemical | Guangdong Sanhe vs. Gan Yuan Foods | Guangdong Sanhe vs. Muyuan Foodstuff Co |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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