Correlation Between New China and Zotye Automobile
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By analyzing existing cross correlation between New China Life and Zotye Automobile Co, you can compare the effects of market volatilities on New China 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 New China with a short position of Zotye Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of New China and Zotye Automobile.
Diversification Opportunities for New China and Zotye Automobile
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between New and Zotye is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding New China Life and Zotye Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zotye Automobile and New China 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 New China Life 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 New China i.e., New China and Zotye Automobile go up and down completely randomly.
Pair Corralation between New China and Zotye Automobile
Assuming the 90 days trading horizon New China Life is expected to generate 0.58 times more return on investment than Zotye Automobile. However, New China Life is 1.72 times less risky than Zotye Automobile. It trades about 0.06 of its potential returns per unit of risk. Zotye Automobile Co is currently generating about 0.0 per unit of risk. If you would invest 3,671 in New China Life on September 26, 2024 and sell it today you would earn a total of 1,438 from holding New China Life or generate 39.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New China Life vs. Zotye Automobile Co
Performance |
| Timeline |
| New China Life |
| Zotye Automobile |
New China and Zotye Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New China and Zotye Automobile
The main advantage of trading using opposite New China and Zotye Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New China 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.| New China vs. Kweichow Moutai Co | New China vs. Shenzhen Mindray Bio Medical | New China vs. Jiangsu Pacific Quartz | New China vs. G bits Network Technology |
| Zotye Automobile vs. New China Life | Zotye Automobile vs. Ming Yang Smart | Zotye Automobile vs. 159681 | Zotye Automobile vs. 159005 |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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