Correlation Between Zhongtong Guomai and New Hope
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By analyzing existing cross correlation between Zhongtong Guomai Communication and New Hope Dairy, you can compare the effects of market volatilities on Zhongtong Guomai and New Hope 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 Zhongtong Guomai with a short position of New Hope. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongtong Guomai and New Hope.
Diversification Opportunities for Zhongtong Guomai and New Hope
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhongtong and New is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Zhongtong Guomai Communication and New Hope Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Hope Dairy and Zhongtong Guomai 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 Zhongtong Guomai Communication are associated (or correlated) with New Hope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Hope Dairy has no effect on the direction of Zhongtong Guomai i.e., Zhongtong Guomai and New Hope go up and down completely randomly.
Pair Corralation between Zhongtong Guomai and New Hope
Assuming the 90 days trading horizon Zhongtong Guomai Communication is expected to generate 1.29 times more return on investment than New Hope. However, Zhongtong Guomai is 1.29 times more volatile than New Hope Dairy. It trades about 0.01 of its potential returns per unit of risk. New Hope Dairy is currently generating about 0.01 per unit of risk. If you would invest 1,233 in Zhongtong Guomai Communication on September 1, 2024 and sell it today you would lose (112.00) from holding Zhongtong Guomai Communication or give up 9.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongtong Guomai Communication vs. New Hope Dairy
Performance |
| Timeline |
| Zhongtong Guomai Com |
| New Hope Dairy |
Zhongtong Guomai and New Hope Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongtong Guomai and New Hope
The main advantage of trading using opposite Zhongtong Guomai and New Hope positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongtong Guomai position performs unexpectedly, New Hope 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 New Hope will offset losses from the drop in New Hope's long position.| Zhongtong Guomai vs. Chengdu B ray Media | Zhongtong Guomai vs. Mango Excellent Media | Zhongtong Guomai vs. Focus Media Information | Zhongtong Guomai vs. JiShi Media Co |
| New Hope vs. Nanjing Putian Telecommunications | New Hope vs. Shenzhen Hifuture Electric | New Hope vs. Tianjin Realty Development | New Hope vs. Shenyang Huitian Thermal |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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