Correlation Between Zhangjiagang Freetrade and Beijing Shunxin
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By analyzing existing cross correlation between Zhangjiagang Freetrade Science and Beijing Shunxin Agriculture, you can compare the effects of market volatilities on Zhangjiagang Freetrade and Beijing Shunxin 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 Zhangjiagang Freetrade with a short position of Beijing Shunxin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhangjiagang Freetrade and Beijing Shunxin.
Diversification Opportunities for Zhangjiagang Freetrade and Beijing Shunxin
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhangjiagang and Beijing is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Zhangjiagang Freetrade Science and Beijing Shunxin Agriculture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Shunxin Agri and Zhangjiagang Freetrade 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 Zhangjiagang Freetrade Science are associated (or correlated) with Beijing Shunxin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Shunxin Agri has no effect on the direction of Zhangjiagang Freetrade i.e., Zhangjiagang Freetrade and Beijing Shunxin go up and down completely randomly.
Pair Corralation between Zhangjiagang Freetrade and Beijing Shunxin
Assuming the 90 days trading horizon Zhangjiagang Freetrade Science is expected to generate 0.82 times more return on investment than Beijing Shunxin. However, Zhangjiagang Freetrade Science is 1.22 times less risky than Beijing Shunxin. It trades about -0.36 of its potential returns per unit of risk. Beijing Shunxin Agriculture is currently generating about -0.3 per unit of risk. If you would invest 401.00 in Zhangjiagang Freetrade Science on October 12, 2024 and sell it today you would lose (56.00) from holding Zhangjiagang Freetrade Science or give up 13.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhangjiagang Freetrade Science vs. Beijing Shunxin Agriculture
Performance |
| Timeline |
| Zhangjiagang Freetrade |
| Beijing Shunxin Agri |
Zhangjiagang Freetrade and Beijing Shunxin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhangjiagang Freetrade and Beijing Shunxin
The main advantage of trading using opposite Zhangjiagang Freetrade and Beijing Shunxin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhangjiagang Freetrade position performs unexpectedly, Beijing Shunxin 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 Beijing Shunxin will offset losses from the drop in Beijing Shunxin's long position.The idea behind Zhangjiagang Freetrade Science and Beijing Shunxin Agriculture 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.
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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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