Correlation Between Sichuan Furong and Zhejiang Yongjin
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By analyzing existing cross correlation between Sichuan Furong Technology and Zhejiang Yongjin Metal, you can compare the effects of market volatilities on Sichuan Furong and Zhejiang Yongjin 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 Sichuan Furong with a short position of Zhejiang Yongjin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Furong and Zhejiang Yongjin.
Diversification Opportunities for Sichuan Furong and Zhejiang Yongjin
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sichuan and Zhejiang is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Furong Technology and Zhejiang Yongjin Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Yongjin Metal and Sichuan Furong 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 Sichuan Furong Technology are associated (or correlated) with Zhejiang Yongjin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Yongjin Metal has no effect on the direction of Sichuan Furong i.e., Sichuan Furong and Zhejiang Yongjin go up and down completely randomly.
Pair Corralation between Sichuan Furong and Zhejiang Yongjin
Assuming the 90 days trading horizon Sichuan Furong Technology is expected to generate 1.83 times more return on investment than Zhejiang Yongjin. However, Sichuan Furong is 1.83 times more volatile than Zhejiang Yongjin Metal. It trades about 0.05 of its potential returns per unit of risk. Zhejiang Yongjin Metal is currently generating about 0.07 per unit of risk. If you would invest 911.00 in Sichuan Furong Technology on October 29, 2024 and sell it today you would earn a total of 303.00 from holding Sichuan Furong Technology or generate 33.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Furong Technology vs. Zhejiang Yongjin Metal
Performance |
| Timeline |
| Sichuan Furong Technology |
| Zhejiang Yongjin Metal |
Sichuan Furong and Zhejiang Yongjin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Furong and Zhejiang Yongjin
The main advantage of trading using opposite Sichuan Furong and Zhejiang Yongjin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Furong position performs unexpectedly, Zhejiang Yongjin 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 Yongjin will offset losses from the drop in Zhejiang Yongjin's long position.| Sichuan Furong vs. Agricultural Bank of | Sichuan Furong vs. Industrial and Commercial | Sichuan Furong vs. Bank of China | Sichuan Furong vs. PetroChina Co Ltd |
| Zhejiang Yongjin vs. Shanghai Yanpu Metal | Zhejiang Yongjin vs. Hainan Airlines Co | Zhejiang Yongjin vs. Sino Platinum Metals Co | Zhejiang Yongjin vs. Western Metal Materials |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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