Correlation Between China Everbright and Zhongjing Food
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By analyzing existing cross correlation between China Everbright Bank and Zhongjing Food Co, you can compare the effects of market volatilities on China Everbright and Zhongjing Food 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 Everbright with a short position of Zhongjing Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Everbright and Zhongjing Food.
Diversification Opportunities for China Everbright and Zhongjing Food
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Zhongjing is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding China Everbright Bank and Zhongjing Food Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongjing Food and China Everbright 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 Everbright Bank are associated (or correlated) with Zhongjing Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongjing Food has no effect on the direction of China Everbright i.e., China Everbright and Zhongjing Food go up and down completely randomly.
Pair Corralation between China Everbright and Zhongjing Food
Assuming the 90 days trading horizon China Everbright Bank is expected to generate 1.22 times more return on investment than Zhongjing Food. However, China Everbright is 1.22 times more volatile than Zhongjing Food Co. It trades about 0.14 of its potential returns per unit of risk. Zhongjing Food Co is currently generating about 0.06 per unit of risk. If you would invest 371.00 in China Everbright Bank on November 4, 2024 and sell it today you would earn a total of 16.00 from holding China Everbright Bank or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Everbright Bank vs. Zhongjing Food Co
Performance |
| Timeline |
| China Everbright Bank |
| Zhongjing Food |
China Everbright and Zhongjing Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Everbright and Zhongjing Food
The main advantage of trading using opposite China Everbright and Zhongjing Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Everbright position performs unexpectedly, Zhongjing Food 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 Zhongjing Food will offset losses from the drop in Zhongjing Food's long position.| China Everbright vs. Yan Tai Shuang | China Everbright vs. Dazhong Transportation Group | China Everbright vs. Hubeiyichang Transportation Group | China Everbright vs. Gan Yuan Foods |
| Zhongjing Food vs. Maxvision Technology Corp | Zhongjing Food vs. Strait Innovation Internet | Zhongjing Food vs. ROPEOK Technology Group | Zhongjing Food vs. Tianjin Hi Tech Development |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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