Correlation Between Liuzhou Chemical and Zhejiang Dahua
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By analyzing existing cross correlation between Liuzhou Chemical Industry and Zhejiang Dahua Technology, you can compare the effects of market volatilities on Liuzhou Chemical and Zhejiang Dahua 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 Liuzhou Chemical with a short position of Zhejiang Dahua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liuzhou Chemical and Zhejiang Dahua.
Diversification Opportunities for Liuzhou Chemical and Zhejiang Dahua
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Liuzhou and Zhejiang is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Liuzhou Chemical Industry and Zhejiang Dahua Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Dahua Technology and Liuzhou Chemical 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 Liuzhou Chemical Industry are associated (or correlated) with Zhejiang Dahua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Dahua Technology has no effect on the direction of Liuzhou Chemical i.e., Liuzhou Chemical and Zhejiang Dahua go up and down completely randomly.
Pair Corralation between Liuzhou Chemical and Zhejiang Dahua
Assuming the 90 days trading horizon Liuzhou Chemical Industry is expected to generate 3.09 times more return on investment than Zhejiang Dahua. However, Liuzhou Chemical is 3.09 times more volatile than Zhejiang Dahua Technology. It trades about 0.07 of its potential returns per unit of risk. Zhejiang Dahua Technology is currently generating about -0.19 per unit of risk. If you would invest 297.00 in Liuzhou Chemical Industry on October 25, 2024 and sell it today you would earn a total of 15.00 from holding Liuzhou Chemical Industry or generate 5.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liuzhou Chemical Industry vs. Zhejiang Dahua Technology
Performance |
| Timeline |
| Liuzhou Chemical Industry |
| Zhejiang Dahua Technology |
Liuzhou Chemical and Zhejiang Dahua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liuzhou Chemical and Zhejiang Dahua
The main advantage of trading using opposite Liuzhou Chemical and Zhejiang Dahua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liuzhou Chemical position performs unexpectedly, Zhejiang Dahua 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 Zhejiang Dahua will offset losses from the drop in Zhejiang Dahua's long position.| Liuzhou Chemical vs. Zijin Mining Group | Liuzhou Chemical vs. Wanhua Chemical Group | Liuzhou Chemical vs. Baoshan Iron Steel | Liuzhou Chemical vs. Rongsheng Petrochemical Co |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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