Correlation Between China State and Zhejiang Yayi
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By analyzing existing cross correlation between China State Construction and Zhejiang Yayi Metal, you can compare the effects of market volatilities on China State and Zhejiang Yayi 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 China State with a short position of Zhejiang Yayi. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Zhejiang Yayi.
Diversification Opportunities for China State and Zhejiang Yayi
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Zhejiang is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Zhejiang Yayi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Yayi Metal and China State 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 China State Construction are associated (or correlated) with Zhejiang Yayi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Yayi Metal has no effect on the direction of China State i.e., China State and Zhejiang Yayi go up and down completely randomly.
Pair Corralation between China State and Zhejiang Yayi
Assuming the 90 days trading horizon China State Construction is expected to generate 0.49 times more return on investment than Zhejiang Yayi. However, China State Construction is 2.03 times less risky than Zhejiang Yayi. It trades about 0.04 of its potential returns per unit of risk. Zhejiang Yayi Metal is currently generating about -0.01 per unit of risk. If you would invest 517.00 in China State Construction on August 25, 2024 and sell it today you would earn a total of 78.00 from holding China State Construction or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China State Construction vs. Zhejiang Yayi Metal
Performance |
| Timeline |
| China State Construction |
| Zhejiang Yayi Metal |
China State and Zhejiang Yayi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Zhejiang Yayi
The main advantage of trading using opposite China State and Zhejiang Yayi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Zhejiang Yayi 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 Yayi will offset losses from the drop in Zhejiang Yayi's long position.| China State vs. Tongxing Environmental Protection | China State vs. Youyou Foods Co | China State vs. Shantou Wanshun Package | China State vs. Suzhou Weizhixiang Food |
| Zhejiang Yayi vs. China Petroleum Chemical | Zhejiang Yayi vs. PetroChina Co Ltd | Zhejiang Yayi vs. China State Construction | Zhejiang Yayi vs. China Railway Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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