Correlation Between Tibet Huayu and Zhejiang Orient
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By analyzing existing cross correlation between Tibet Huayu Mining and Zhejiang Orient Gene, you can compare the effects of market volatilities on Tibet Huayu and Zhejiang Orient 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 Tibet Huayu with a short position of Zhejiang Orient. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tibet Huayu and Zhejiang Orient.
Diversification Opportunities for Tibet Huayu and Zhejiang Orient
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tibet and Zhejiang is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Tibet Huayu Mining and Zhejiang Orient Gene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Orient Gene and Tibet Huayu 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 Tibet Huayu Mining are associated (or correlated) with Zhejiang Orient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Orient Gene has no effect on the direction of Tibet Huayu i.e., Tibet Huayu and Zhejiang Orient go up and down completely randomly.
Pair Corralation between Tibet Huayu and Zhejiang Orient
Assuming the 90 days trading horizon Tibet Huayu Mining is expected to generate 1.16 times more return on investment than Zhejiang Orient. However, Tibet Huayu is 1.16 times more volatile than Zhejiang Orient Gene. It trades about 0.06 of its potential returns per unit of risk. Zhejiang Orient Gene is currently generating about -0.12 per unit of risk. If you would invest 1,348 in Tibet Huayu Mining on September 3, 2024 and sell it today you would earn a total of 91.00 from holding Tibet Huayu Mining or generate 6.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tibet Huayu Mining vs. Zhejiang Orient Gene
Performance |
| Timeline |
| Tibet Huayu Mining |
| Zhejiang Orient Gene |
Tibet Huayu and Zhejiang Orient Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tibet Huayu and Zhejiang Orient
The main advantage of trading using opposite Tibet Huayu and Zhejiang Orient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tibet Huayu position performs unexpectedly, Zhejiang Orient 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 Orient will offset losses from the drop in Zhejiang Orient's long position.| Tibet Huayu vs. Zijin Mining Group | Tibet Huayu vs. Baoshan Iron Steel | Tibet Huayu vs. Rongsheng Petrochemical Co | Tibet Huayu vs. Hoshine Silicon Ind |
| Zhejiang Orient vs. Gem Year Industrial Co | Zhejiang Orient vs. Bomesc Offshore Engineering | Zhejiang Orient vs. Tibet Huayu Mining | Zhejiang Orient vs. Xinjiang Baodi Mining |
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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