Correlation Between New China and Zhejiang Construction
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By analyzing existing cross correlation between New China Life and Zhejiang Construction Investment, you can compare the effects of market volatilities on New China 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 New China with a short position of Zhejiang Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of New China and Zhejiang Construction.
Diversification Opportunities for New China and Zhejiang Construction
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 Construction Investme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Construction 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 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 New China i.e., New China and Zhejiang Construction go up and down completely randomly.
Pair Corralation between New China and Zhejiang Construction
Assuming the 90 days trading horizon New China Life is expected to generate 0.78 times more return on investment than Zhejiang Construction. However, New China Life is 1.29 times less risky than Zhejiang Construction. It trades about 0.02 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 4,202 in New China Life on August 30, 2024 and sell it today you would earn a total of 490.00 from holding New China Life or generate 11.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
New China Life vs. Zhejiang Construction Investme
Performance |
| Timeline |
| New China Life |
| Zhejiang Construction |
New China and Zhejiang Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New China and Zhejiang Construction
The main advantage of trading using opposite New China and Zhejiang Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New China 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.| New China vs. Eastroc Beverage Group | New China vs. Hangzhou Coco Healthcare | New China vs. Dazhong Transportation Group | New China vs. CICC Fund Management |
| Zhejiang Construction vs. Agricultural Bank of | Zhejiang Construction vs. Industrial and Commercial | Zhejiang Construction vs. Bank of China | Zhejiang Construction vs. China Construction Bank |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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