Correlation Between Southern PublishingMedia and Zoomlion Heavy
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By analyzing existing cross correlation between Southern PublishingMedia Co and Zoomlion Heavy Industry, you can compare the effects of market volatilities on Southern PublishingMedia and Zoomlion Heavy 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 Southern PublishingMedia with a short position of Zoomlion Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern PublishingMedia and Zoomlion Heavy.
Diversification Opportunities for Southern PublishingMedia and Zoomlion Heavy
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Southern and Zoomlion is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Southern PublishingMedia Co and Zoomlion Heavy Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoomlion Heavy Industry and Southern PublishingMedia 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 Southern PublishingMedia Co are associated (or correlated) with Zoomlion Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoomlion Heavy Industry has no effect on the direction of Southern PublishingMedia i.e., Southern PublishingMedia and Zoomlion Heavy go up and down completely randomly.
Pair Corralation between Southern PublishingMedia and Zoomlion Heavy
Assuming the 90 days trading horizon Southern PublishingMedia Co is expected to generate 2.22 times more return on investment than Zoomlion Heavy. However, Southern PublishingMedia is 2.22 times more volatile than Zoomlion Heavy Industry. It trades about 0.05 of its potential returns per unit of risk. Zoomlion Heavy Industry is currently generating about 0.03 per unit of risk. If you would invest 811.00 in Southern PublishingMedia Co on October 16, 2024 and sell it today you would earn a total of 608.00 from holding Southern PublishingMedia Co or generate 74.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern PublishingMedia Co vs. Zoomlion Heavy Industry
Performance |
| Timeline |
| Southern PublishingMedia |
| Zoomlion Heavy Industry |
Southern PublishingMedia and Zoomlion Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern PublishingMedia and Zoomlion Heavy
The main advantage of trading using opposite Southern PublishingMedia and Zoomlion Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern PublishingMedia position performs unexpectedly, Zoomlion Heavy 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 Zoomlion Heavy will offset losses from the drop in Zoomlion Heavy's long position.The idea behind Southern PublishingMedia Co and Zoomlion Heavy Industry pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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