Correlation Between New China and Zhejiang Zanyu
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By analyzing existing cross correlation between New China Life and Zhejiang Zanyu Technology, you can compare the effects of market volatilities on New China and Zhejiang Zanyu 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 Zhejiang Zanyu. Check out your portfolio center. Please also check ongoing floating volatility patterns of New China and Zhejiang Zanyu.
Diversification Opportunities for New China and Zhejiang Zanyu
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between New and Zhejiang is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding New China Life and Zhejiang Zanyu Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Zanyu Technology 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 Zhejiang Zanyu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Zanyu Technology has no effect on the direction of New China i.e., New China and Zhejiang Zanyu go up and down completely randomly.
Pair Corralation between New China and Zhejiang Zanyu
Assuming the 90 days trading horizon New China Life is expected to under-perform the Zhejiang Zanyu. But the stock apears to be less risky and, when comparing its historical volatility, New China Life is 1.02 times less risky than Zhejiang Zanyu. The stock trades about 0.0 of its potential returns per unit of risk. The Zhejiang Zanyu Technology is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 895.00 in Zhejiang Zanyu Technology on September 1, 2024 and sell it today you would earn a total of 215.00 from holding Zhejiang Zanyu Technology or generate 24.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
New China Life vs. Zhejiang Zanyu Technology
Performance |
| Timeline |
| New China Life |
| Zhejiang Zanyu Technology |
New China and Zhejiang Zanyu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New China and Zhejiang Zanyu
The main advantage of trading using opposite New China and Zhejiang Zanyu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New China position performs unexpectedly, Zhejiang Zanyu 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 Zanyu will offset losses from the drop in Zhejiang Zanyu's long position.| New China vs. Southchip Semiconductor Technology | New China vs. Rising Nonferrous Metals | New China vs. Shandong Hongchuang Aluminum | New China vs. StarPower Semiconductor |
| Zhejiang Zanyu vs. Zijin Mining Group | Zhejiang Zanyu vs. Wanhua Chemical Group | Zhejiang Zanyu vs. Baoshan Iron Steel | Zhejiang Zanyu vs. Shandong Gold 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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