Correlation Between Zhejiang Juhua and Shaanxi Beiyuan
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By analyzing existing cross correlation between Zhejiang Juhua Co and Shaanxi Beiyuan Chemical, you can compare the effects of market volatilities on Zhejiang Juhua and Shaanxi Beiyuan 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 Shaanxi Beiyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Juhua and Shaanxi Beiyuan.
Diversification Opportunities for Zhejiang Juhua and Shaanxi Beiyuan
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Zhejiang and Shaanxi is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Juhua Co and Shaanxi Beiyuan Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Beiyuan 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 Shaanxi Beiyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Beiyuan Chemical has no effect on the direction of Zhejiang Juhua i.e., Zhejiang Juhua and Shaanxi Beiyuan go up and down completely randomly.
Pair Corralation between Zhejiang Juhua and Shaanxi Beiyuan
Assuming the 90 days trading horizon Zhejiang Juhua Co is expected to generate 1.91 times more return on investment than Shaanxi Beiyuan. However, Zhejiang Juhua is 1.91 times more volatile than Shaanxi Beiyuan Chemical. It trades about 0.05 of its potential returns per unit of risk. Shaanxi Beiyuan Chemical is currently generating about -0.01 per unit of risk. If you would invest 1,494 in Zhejiang Juhua Co on September 12, 2024 and sell it today you would earn a total of 787.00 from holding Zhejiang Juhua Co or generate 52.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Juhua Co vs. Shaanxi Beiyuan Chemical
Performance |
| Timeline |
| Zhejiang Juhua |
| Shaanxi Beiyuan Chemical |
Zhejiang Juhua and Shaanxi Beiyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Juhua and Shaanxi Beiyuan
The main advantage of trading using opposite Zhejiang Juhua and Shaanxi Beiyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Juhua position performs unexpectedly, Shaanxi Beiyuan 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 Shaanxi Beiyuan will offset losses from the drop in Shaanxi Beiyuan'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 |
| Shaanxi Beiyuan vs. HUAQIN TECHNOLOGY LTD | Shaanxi Beiyuan vs. Jinhe Biotechnology Co | Shaanxi Beiyuan vs. Shaanxi Energy Investment | Shaanxi Beiyuan vs. Zhejiang Construction Investment |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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