Correlation Between Xinjiang Tianrun and ZTE Corp
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By analyzing existing cross correlation between Xinjiang Tianrun Dairy and ZTE Corp, you can compare the effects of market volatilities on Xinjiang Tianrun and ZTE Corp 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 Xinjiang Tianrun with a short position of ZTE Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Tianrun and ZTE Corp.
Diversification Opportunities for Xinjiang Tianrun and ZTE Corp
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xinjiang and ZTE is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Tianrun Dairy and ZTE Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZTE Corp and Xinjiang Tianrun 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 Xinjiang Tianrun Dairy are associated (or correlated) with ZTE Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZTE Corp has no effect on the direction of Xinjiang Tianrun i.e., Xinjiang Tianrun and ZTE Corp go up and down completely randomly.
Pair Corralation between Xinjiang Tianrun and ZTE Corp
Assuming the 90 days trading horizon Xinjiang Tianrun Dairy is expected to under-perform the ZTE Corp. But the stock apears to be less risky and, when comparing its historical volatility, Xinjiang Tianrun Dairy is 1.27 times less risky than ZTE Corp. The stock trades about -0.04 of its potential returns per unit of risk. The ZTE Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,548 in ZTE Corp on September 26, 2024 and sell it today you would earn a total of 1,261 from holding ZTE Corp or generate 49.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Tianrun Dairy vs. ZTE Corp
Performance |
| Timeline |
| Xinjiang Tianrun Dairy |
| ZTE Corp |
Xinjiang Tianrun and ZTE Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Tianrun and ZTE Corp
The main advantage of trading using opposite Xinjiang Tianrun and ZTE Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Tianrun position performs unexpectedly, ZTE Corp 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 ZTE Corp will offset losses from the drop in ZTE Corp's long position.| Xinjiang Tianrun vs. Hengli Industrial Development | Xinjiang Tianrun vs. Universal Scientific Industrial | Xinjiang Tianrun vs. Ningbo Thermal Power | Xinjiang Tianrun vs. Uroica Mining Safety |
| ZTE Corp vs. Guilin Seamild Foods | ZTE Corp vs. Xinjiang Tianrun Dairy | ZTE Corp vs. Suzhou Weizhixiang Food | ZTE Corp vs. Gansu Huangtai Wine marketing |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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