Correlation Between Gansu Jiu and Zotye Automobile
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By analyzing existing cross correlation between Gansu Jiu Steel and Zotye Automobile Co, you can compare the effects of market volatilities on Gansu Jiu and Zotye Automobile 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 Gansu Jiu with a short position of Zotye Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Zotye Automobile.
Diversification Opportunities for Gansu Jiu and Zotye Automobile
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gansu and Zotye is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Zotye Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zotye Automobile and Gansu Jiu 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 Gansu Jiu Steel are associated (or correlated) with Zotye Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zotye Automobile has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Zotye Automobile go up and down completely randomly.
Pair Corralation between Gansu Jiu and Zotye Automobile
Assuming the 90 days trading horizon Gansu Jiu is expected to generate 1.45 times less return on investment than Zotye Automobile. But when comparing it to its historical volatility, Gansu Jiu Steel is 1.07 times less risky than Zotye Automobile. It trades about 0.19 of its potential returns per unit of risk. Zotye Automobile Co is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 200.00 in Zotye Automobile Co on August 23, 2024 and sell it today you would earn a total of 70.00 from holding Zotye Automobile Co or generate 35.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Zotye Automobile Co
Performance |
| Timeline |
| Gansu Jiu Steel |
| Zotye Automobile |
Gansu Jiu and Zotye Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Zotye Automobile
The main advantage of trading using opposite Gansu Jiu and Zotye Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Zotye Automobile 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 Zotye Automobile will offset losses from the drop in Zotye Automobile's long position.| Gansu Jiu vs. Wanhua Chemical Group | Gansu Jiu vs. Shandong Gold Mining | Gansu Jiu vs. Inner Mongolia BaoTou | Gansu Jiu vs. Jiangxi Ganfeng Lithium |
| Zotye Automobile vs. China Mobile Limited | Zotye Automobile vs. Gansu Jiu Steel | Zotye Automobile vs. Shandong Mining Machinery | Zotye Automobile vs. Aba Chemicals Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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