Correlation Between New China and Zhejiang Orient
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By analyzing existing cross correlation between New China Life and Zhejiang Orient Gene, you can compare the effects of market volatilities on New China and Zhejiang Orient 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 Orient. Check out your portfolio center. Please also check ongoing floating volatility patterns of New China and Zhejiang Orient.
Diversification Opportunities for New China and Zhejiang Orient
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between New and Zhejiang is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding New China Life and Zhejiang Orient Gene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Orient Gene 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 Orient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Orient Gene has no effect on the direction of New China i.e., New China and Zhejiang Orient go up and down completely randomly.
Pair Corralation between New China and Zhejiang Orient
Assuming the 90 days trading horizon New China Life is expected to generate 1.3 times more return on investment than Zhejiang Orient. However, New China is 1.3 times more volatile than Zhejiang Orient Gene. It trades about 0.2 of its potential returns per unit of risk. Zhejiang Orient Gene is currently generating about -0.14 per unit of risk. If you would invest 4,638 in New China Life on September 28, 2024 and sell it today you would earn a total of 459.00 from holding New China Life or generate 9.9% 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. Zhejiang Orient Gene
Performance |
| Timeline |
| New China Life |
| Zhejiang Orient Gene |
New China and Zhejiang Orient Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New China and Zhejiang Orient
The main advantage of trading using opposite New China and Zhejiang Orient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New China position performs unexpectedly, Zhejiang Orient 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 Orient will offset losses from the drop in Zhejiang Orient's long position.| New China vs. Grandblue Environment Co | New China vs. Shenzhen Centralcon Investment | New China vs. Henan Shuanghui Investment | New China vs. Nuode Investment Co |
| Zhejiang Orient vs. Ningxia Younglight Chemicals | Zhejiang Orient vs. Andon Health Co | Zhejiang Orient vs. Sanbo Hospital Management | Zhejiang Orient vs. Goodwill E Health |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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