Correlation Between Heilongjiang Transport and Zhongtong Guomai
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By analyzing existing cross correlation between Heilongjiang Transport Development and Zhongtong Guomai Communication, you can compare the effects of market volatilities on Heilongjiang Transport and Zhongtong Guomai 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 Zhongtong Guomai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heilongjiang Transport and Zhongtong Guomai.
Diversification Opportunities for Heilongjiang Transport and Zhongtong Guomai
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Heilongjiang and Zhongtong is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Heilongjiang Transport Develop and Zhongtong Guomai Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongtong Guomai Com 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 Zhongtong Guomai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongtong Guomai Com has no effect on the direction of Heilongjiang Transport i.e., Heilongjiang Transport and Zhongtong Guomai go up and down completely randomly.
Pair Corralation between Heilongjiang Transport and Zhongtong Guomai
Assuming the 90 days trading horizon Heilongjiang Transport is expected to generate 1.36 times less return on investment than Zhongtong Guomai. But when comparing it to its historical volatility, Heilongjiang Transport Development is 2.55 times less risky than Zhongtong Guomai. It trades about 0.25 of its potential returns per unit of risk. Zhongtong Guomai Communication is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 998.00 in Zhongtong Guomai Communication on August 31, 2024 and sell it today you would earn a total of 118.00 from holding Zhongtong Guomai Communication or generate 11.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heilongjiang Transport Develop vs. Zhongtong Guomai Communication
Performance |
| Timeline |
| Heilongjiang Transport |
| Zhongtong Guomai Com |
Heilongjiang Transport and Zhongtong Guomai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heilongjiang Transport and Zhongtong Guomai
The main advantage of trading using opposite Heilongjiang Transport and Zhongtong Guomai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heilongjiang Transport position performs unexpectedly, Zhongtong Guomai 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 Zhongtong Guomai will offset losses from the drop in Zhongtong Guomai's long position.| Heilongjiang Transport vs. Cultural Investment Holdings | Heilongjiang Transport vs. Gome Telecom Equipment | Heilongjiang Transport vs. Bus Online Co | Heilongjiang Transport vs. Holitech Technology Co |
| Zhongtong Guomai vs. Kweichow Moutai Co | Zhongtong Guomai vs. NAURA Technology Group | Zhongtong Guomai vs. APT Medical | Zhongtong Guomai vs. Contemporary Amperex Technology |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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