Correlation Between Keda Clean and Zhejiang Yayi
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By analyzing existing cross correlation between Keda Clean Energy and Zhejiang Yayi Metal, you can compare the effects of market volatilities on Keda Clean and Zhejiang Yayi 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 Keda Clean with a short position of Zhejiang Yayi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keda Clean and Zhejiang Yayi.
Diversification Opportunities for Keda Clean and Zhejiang Yayi
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Keda and Zhejiang is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Keda Clean Energy and Zhejiang Yayi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Yayi Metal and Keda Clean 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 Keda Clean Energy are associated (or correlated) with Zhejiang Yayi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Yayi Metal has no effect on the direction of Keda Clean i.e., Keda Clean and Zhejiang Yayi go up and down completely randomly.
Pair Corralation between Keda Clean and Zhejiang Yayi
Assuming the 90 days trading horizon Keda Clean is expected to generate 1.37 times less return on investment than Zhejiang Yayi. But when comparing it to its historical volatility, Keda Clean Energy is 1.56 times less risky than Zhejiang Yayi. It trades about 0.18 of its potential returns per unit of risk. Zhejiang Yayi Metal is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,258 in Zhejiang Yayi Metal on November 7, 2024 and sell it today you would earn a total of 120.00 from holding Zhejiang Yayi Metal or generate 5.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keda Clean Energy vs. Zhejiang Yayi Metal
Performance |
| Timeline |
| Keda Clean Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Zhejiang Yayi Metal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Keda Clean and Zhejiang Yayi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keda Clean and Zhejiang Yayi
The main advantage of trading using opposite Keda Clean and Zhejiang Yayi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keda Clean position performs unexpectedly, Zhejiang Yayi 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 Yayi will offset losses from the drop in Zhejiang Yayi's long position.The idea behind Keda Clean Energy and Zhejiang Yayi Metal pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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