Correlation Between Zhejiang Publishing and Red Avenue
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By analyzing existing cross correlation between Zhejiang Publishing Media and Red Avenue New, you can compare the effects of market volatilities on Zhejiang Publishing and Red Avenue 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 Zhejiang Publishing with a short position of Red Avenue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Publishing and Red Avenue.
Diversification Opportunities for Zhejiang Publishing and Red Avenue
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Zhejiang and Red is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Publishing Media and Red Avenue New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Avenue New and Zhejiang Publishing 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 Zhejiang Publishing Media are associated (or correlated) with Red Avenue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Avenue New has no effect on the direction of Zhejiang Publishing i.e., Zhejiang Publishing and Red Avenue go up and down completely randomly.
Pair Corralation between Zhejiang Publishing and Red Avenue
Assuming the 90 days trading horizon Zhejiang Publishing is expected to generate 5.48 times less return on investment than Red Avenue. But when comparing it to its historical volatility, Zhejiang Publishing Media is 1.66 times less risky than Red Avenue. It trades about 0.03 of its potential returns per unit of risk. Red Avenue New is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,238 in Red Avenue New on August 31, 2024 and sell it today you would earn a total of 241.00 from holding Red Avenue New or generate 7.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Zhejiang Publishing Media vs. Red Avenue New
Performance |
| Timeline |
| Zhejiang Publishing Media |
| Red Avenue New |
Zhejiang Publishing and Red Avenue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Publishing and Red Avenue
The main advantage of trading using opposite Zhejiang Publishing and Red Avenue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Publishing position performs unexpectedly, Red Avenue 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 Red Avenue will offset losses from the drop in Red Avenue's long position.| Zhejiang Publishing vs. BYD Co Ltd | Zhejiang Publishing vs. Agricultural Bank of | Zhejiang Publishing vs. Industrial and Commercial | Zhejiang Publishing vs. China State Construction |
| Red Avenue vs. Harbin Air Conditioning | Red Avenue vs. Guangzhou Ruoyuchen Information | Red Avenue vs. Jonjee Hi tech Industrial | Red Avenue vs. Yunnan Xiyi Industrial |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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