Correlation Between Mengtian Home and Zoy Home
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By analyzing existing cross correlation between Mengtian Home Group and Zoy Home Furnishing, you can compare the effects of market volatilities on Mengtian Home and Zoy Home 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 Zoy Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mengtian Home and Zoy Home.
Diversification Opportunities for Mengtian Home and Zoy Home
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mengtian and Zoy is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Mengtian Home Group and Zoy Home Furnishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoy Home Furnishing 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 Zoy Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoy Home Furnishing has no effect on the direction of Mengtian Home i.e., Mengtian Home and Zoy Home go up and down completely randomly.
Pair Corralation between Mengtian Home and Zoy Home
Assuming the 90 days trading horizon Mengtian Home is expected to generate 1.15 times less return on investment than Zoy Home. But when comparing it to its historical volatility, Mengtian Home Group is 1.55 times less risky than Zoy Home. It trades about 0.09 of its potential returns per unit of risk. Zoy Home Furnishing is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,071 in Zoy Home Furnishing on August 29, 2024 and sell it today you would earn a total of 36.00 from holding Zoy Home Furnishing or generate 3.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mengtian Home Group vs. Zoy Home Furnishing
Performance |
| Timeline |
| Mengtian Home Group |
| Zoy Home Furnishing |
Mengtian Home and Zoy Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mengtian Home and Zoy Home
The main advantage of trading using opposite Mengtian Home and Zoy Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mengtian Home position performs unexpectedly, Zoy Home 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 Zoy Home will offset losses from the drop in Zoy Home's long position.| Mengtian Home vs. Agricultural Bank of | Mengtian Home vs. Industrial and Commercial | Mengtian Home vs. Bank of China | Mengtian Home vs. China Construction Bank |
| Zoy Home vs. Agricultural Bank of | Zoy Home vs. Industrial and Commercial | Zoy Home vs. Bank of China | Zoy Home vs. China Construction Bank |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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