Correlation Between Zhejiang Daily and WuXi Xinje
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By analyzing existing cross correlation between Zhejiang Daily Media and WuXi Xinje Electric, you can compare the effects of market volatilities on Zhejiang Daily and WuXi Xinje 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 Daily with a short position of WuXi Xinje. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Daily and WuXi Xinje.
Diversification Opportunities for Zhejiang Daily and WuXi Xinje
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and WuXi is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Daily Media and WuXi Xinje Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi Xinje Electric and Zhejiang Daily 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 Daily Media are associated (or correlated) with WuXi Xinje. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi Xinje Electric has no effect on the direction of Zhejiang Daily i.e., Zhejiang Daily and WuXi Xinje go up and down completely randomly.
Pair Corralation between Zhejiang Daily and WuXi Xinje
Assuming the 90 days trading horizon Zhejiang Daily is expected to generate 28.77 times less return on investment than WuXi Xinje. But when comparing it to its historical volatility, Zhejiang Daily Media is 1.15 times less risky than WuXi Xinje. It trades about 0.01 of its potential returns per unit of risk. WuXi Xinje Electric is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 3,504 in WuXi Xinje Electric on September 27, 2024 and sell it today you would earn a total of 584.00 from holding WuXi Xinje Electric or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Zhejiang Daily Media vs. WuXi Xinje Electric
Performance |
| Timeline |
| Zhejiang Daily Media |
| WuXi Xinje Electric |
Zhejiang Daily and WuXi Xinje Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Daily and WuXi Xinje
The main advantage of trading using opposite Zhejiang Daily and WuXi Xinje positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Daily position performs unexpectedly, WuXi Xinje 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 WuXi Xinje will offset losses from the drop in WuXi Xinje's long position.| Zhejiang Daily vs. Agricultural Bank of | Zhejiang Daily vs. Industrial and Commercial | Zhejiang Daily vs. Bank of China | Zhejiang Daily vs. China Construction Bank |
| WuXi Xinje vs. Industrial and Commercial | WuXi Xinje vs. China Construction Bank | WuXi Xinje vs. Agricultural Bank of | WuXi Xinje vs. Bank of China |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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