Correlation Between Shanghai Ziyan and Zhangjiagang Freetrade
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By analyzing existing cross correlation between Shanghai Ziyan Foods and Zhangjiagang Freetrade Science, you can compare the effects of market volatilities on Shanghai Ziyan and Zhangjiagang Freetrade 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 Shanghai Ziyan with a short position of Zhangjiagang Freetrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Ziyan and Zhangjiagang Freetrade.
Diversification Opportunities for Shanghai Ziyan and Zhangjiagang Freetrade
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Zhangjiagang is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Ziyan Foods and Zhangjiagang Freetrade Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhangjiagang Freetrade and Shanghai Ziyan 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 Shanghai Ziyan Foods are associated (or correlated) with Zhangjiagang Freetrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhangjiagang Freetrade has no effect on the direction of Shanghai Ziyan i.e., Shanghai Ziyan and Zhangjiagang Freetrade go up and down completely randomly.
Pair Corralation between Shanghai Ziyan and Zhangjiagang Freetrade
Assuming the 90 days trading horizon Shanghai Ziyan Foods is expected to under-perform the Zhangjiagang Freetrade. In addition to that, Shanghai Ziyan is 1.16 times more volatile than Zhangjiagang Freetrade Science. It trades about -0.03 of its total potential returns per unit of risk. Zhangjiagang Freetrade Science is currently generating about 0.0 per unit of volatility. If you would invest 401.00 in Zhangjiagang Freetrade Science on November 7, 2024 and sell it today you would lose (53.00) from holding Zhangjiagang Freetrade Science or give up 13.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Ziyan Foods vs. Zhangjiagang Freetrade Science
Performance |
| Timeline |
| Shanghai Ziyan Foods |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Zhangjiagang Freetrade |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Shanghai Ziyan and Zhangjiagang Freetrade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Ziyan and Zhangjiagang Freetrade
The main advantage of trading using opposite Shanghai Ziyan and Zhangjiagang Freetrade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Ziyan position performs unexpectedly, Zhangjiagang Freetrade 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 Zhangjiagang Freetrade will offset losses from the drop in Zhangjiagang Freetrade's long position.The idea behind Shanghai Ziyan Foods and Zhangjiagang Freetrade Science 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.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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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