Correlation Between Mengtian Home and Zhejiang JIULI
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By analyzing existing cross correlation between Mengtian Home Group and Zhejiang JIULI Hi tech, you can compare the effects of market volatilities on Mengtian Home and Zhejiang JIULI 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 Mengtian Home with a short position of Zhejiang JIULI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mengtian Home and Zhejiang JIULI.
Diversification Opportunities for Mengtian Home and Zhejiang JIULI
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mengtian and Zhejiang is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Mengtian Home Group and Zhejiang JIULI Hi tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang JIULI Hi and Mengtian Home 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 Mengtian Home Group are associated (or correlated) with Zhejiang JIULI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang JIULI Hi has no effect on the direction of Mengtian Home i.e., Mengtian Home and Zhejiang JIULI go up and down completely randomly.
Pair Corralation between Mengtian Home and Zhejiang JIULI
Assuming the 90 days trading horizon Mengtian Home Group is expected to generate 1.17 times more return on investment than Zhejiang JIULI. However, Mengtian Home is 1.17 times more volatile than Zhejiang JIULI Hi tech. It trades about 0.12 of its potential returns per unit of risk. Zhejiang JIULI Hi tech is currently generating about 0.01 per unit of risk. If you would invest 866.00 in Mengtian Home Group on September 18, 2024 and sell it today you would earn a total of 472.00 from holding Mengtian Home Group or generate 54.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.38% |
| Values | Daily Returns |
Mengtian Home Group vs. Zhejiang JIULI Hi tech
Performance |
| Timeline |
| Mengtian Home Group |
| Zhejiang JIULI Hi |
Mengtian Home and Zhejiang JIULI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mengtian Home and Zhejiang JIULI
The main advantage of trading using opposite Mengtian Home and Zhejiang JIULI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mengtian Home position performs unexpectedly, Zhejiang JIULI 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 JIULI will offset losses from the drop in Zhejiang JIULI's long position.| Mengtian Home vs. Lutian Machinery Co | Mengtian Home vs. China Longyuan Power | Mengtian Home vs. PetroChina Co Ltd | Mengtian Home vs. Bank of China |
| Zhejiang JIULI vs. Zijin Mining Group | Zhejiang JIULI vs. Wanhua Chemical Group | Zhejiang JIULI vs. Baoshan Iron Steel | Zhejiang JIULI vs. Shandong Gold Mining |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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