Correlation Between Dongxing Sec and Zhejiang Construction
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By analyzing existing cross correlation between Dongxing Sec Co and Zhejiang Construction Investment, you can compare the effects of market volatilities on Dongxing Sec and Zhejiang Construction 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 Dongxing Sec with a short position of Zhejiang Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongxing Sec and Zhejiang Construction.
Diversification Opportunities for Dongxing Sec and Zhejiang Construction
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongxing and Zhejiang is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Dongxing Sec Co and Zhejiang Construction Investme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Construction and Dongxing Sec 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 Dongxing Sec Co are associated (or correlated) with Zhejiang Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Construction has no effect on the direction of Dongxing Sec i.e., Dongxing Sec and Zhejiang Construction go up and down completely randomly.
Pair Corralation between Dongxing Sec and Zhejiang Construction
Assuming the 90 days trading horizon Dongxing Sec Co is expected to generate 0.76 times more return on investment than Zhejiang Construction. However, Dongxing Sec Co is 1.32 times less risky than Zhejiang Construction. It trades about 0.05 of its potential returns per unit of risk. Zhejiang Construction Investment is currently generating about -0.03 per unit of risk. If you would invest 815.00 in Dongxing Sec Co on August 31, 2024 and sell it today you would earn a total of 301.00 from holding Dongxing Sec Co or generate 36.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongxing Sec Co vs. Zhejiang Construction Investme
Performance |
| Timeline |
| Dongxing Sec |
| Zhejiang Construction |
Dongxing Sec and Zhejiang Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongxing Sec and Zhejiang Construction
The main advantage of trading using opposite Dongxing Sec and Zhejiang Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongxing Sec position performs unexpectedly, Zhejiang Construction 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 Construction will offset losses from the drop in Zhejiang Construction's long position.| Dongxing Sec vs. Advanced Technology Materials | Dongxing Sec vs. Sichuan Jinshi Technology | Dongxing Sec vs. Xinke Material | Dongxing Sec vs. Jiangxi Hengda Hi Tech |
| Zhejiang Construction vs. China State Construction | Zhejiang Construction vs. China Merchants Shekou | Zhejiang Construction vs. Huafa Industrial Co | Zhejiang Construction vs. China International Capital |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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