Correlation Between Heilongjiang Transport and Zotye Automobile
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By analyzing existing cross correlation between Heilongjiang Transport Development and Zotye Automobile Co, you can compare the effects of market volatilities on Heilongjiang Transport and Zotye Automobile 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 Heilongjiang Transport with a short position of Zotye Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heilongjiang Transport and Zotye Automobile.
Diversification Opportunities for Heilongjiang Transport and Zotye Automobile
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Heilongjiang and Zotye is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Heilongjiang Transport Develop and Zotye Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zotye Automobile and Heilongjiang Transport 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 Heilongjiang Transport Development are associated (or correlated) with Zotye Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zotye Automobile has no effect on the direction of Heilongjiang Transport i.e., Heilongjiang Transport and Zotye Automobile go up and down completely randomly.
Pair Corralation between Heilongjiang Transport and Zotye Automobile
Assuming the 90 days trading horizon Heilongjiang Transport is expected to generate 1.3 times less return on investment than Zotye Automobile. But when comparing it to its historical volatility, Heilongjiang Transport Development is 2.63 times less risky than Zotye Automobile. It trades about 0.23 of its potential returns per unit of risk. Zotye Automobile Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 248.00 in Zotye Automobile Co on September 4, 2024 and sell it today you would earn a total of 23.00 from holding Zotye Automobile Co or generate 9.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heilongjiang Transport Develop vs. Zotye Automobile Co
Performance |
| Timeline |
| Heilongjiang Transport |
| Zotye Automobile |
Heilongjiang Transport and Zotye Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heilongjiang Transport and Zotye Automobile
The main advantage of trading using opposite Heilongjiang Transport and Zotye Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heilongjiang Transport position performs unexpectedly, Zotye Automobile 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 Zotye Automobile will offset losses from the drop in Zotye Automobile's long position.| Heilongjiang Transport vs. Dongfeng Automobile Co | Heilongjiang Transport vs. Anhui Jianghuai Automobile | Heilongjiang Transport vs. HaiXin Foods Co | Heilongjiang Transport vs. Fujian Anjoy Foods |
| Zotye Automobile vs. Industrial and Commercial | Zotye Automobile vs. China Construction Bank | Zotye Automobile vs. Agricultural Bank of | Zotye Automobile 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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