Correlation Between Dr Peng and Zhejiang Tailin
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By analyzing existing cross correlation between Dr Peng Telecom and Zhejiang Tailin Bioengineering, you can compare the effects of market volatilities on Dr Peng and Zhejiang Tailin 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 Dr Peng with a short position of Zhejiang Tailin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dr Peng and Zhejiang Tailin.
Diversification Opportunities for Dr Peng and Zhejiang Tailin
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between 600804 and Zhejiang is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Dr Peng Telecom and Zhejiang Tailin Bioengineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Tailin Bioe and Dr Peng 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 Dr Peng Telecom are associated (or correlated) with Zhejiang Tailin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Tailin Bioe has no effect on the direction of Dr Peng i.e., Dr Peng and Zhejiang Tailin go up and down completely randomly.
Pair Corralation between Dr Peng and Zhejiang Tailin
Assuming the 90 days trading horizon Dr Peng Telecom is expected to under-perform the Zhejiang Tailin. In addition to that, Dr Peng is 1.25 times more volatile than Zhejiang Tailin Bioengineering. It trades about -0.12 of its total potential returns per unit of risk. Zhejiang Tailin Bioengineering is currently generating about 0.22 per unit of volatility. If you would invest 1,733 in Zhejiang Tailin Bioengineering on November 7, 2024 and sell it today you would earn a total of 165.00 from holding Zhejiang Tailin Bioengineering or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dr Peng Telecom vs. Zhejiang Tailin Bioengineering
Performance |
| Timeline |
| Dr Peng Telecom |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Zhejiang Tailin Bioe |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Dr Peng and Zhejiang Tailin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dr Peng and Zhejiang Tailin
The main advantage of trading using opposite Dr Peng and Zhejiang Tailin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dr Peng position performs unexpectedly, Zhejiang Tailin 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 Tailin will offset losses from the drop in Zhejiang Tailin's long position.The idea behind Dr Peng Telecom and Zhejiang Tailin Bioengineering 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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