Correlation Between Zoy Home and Shandong Mining
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By analyzing existing cross correlation between Zoy Home Furnishing and Shandong Mining Machinery, you can compare the effects of market volatilities on Zoy Home and Shandong Mining 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 Zoy Home with a short position of Shandong Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoy Home and Shandong Mining.
Diversification Opportunities for Zoy Home and Shandong Mining
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zoy and Shandong is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Zoy Home Furnishing and Shandong Mining Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Mining Machinery and Zoy 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 Zoy Home Furnishing are associated (or correlated) with Shandong Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Mining Machinery has no effect on the direction of Zoy Home i.e., Zoy Home and Shandong Mining go up and down completely randomly.
Pair Corralation between Zoy Home and Shandong Mining
Assuming the 90 days trading horizon Zoy Home Furnishing is expected to generate 0.96 times more return on investment than Shandong Mining. However, Zoy Home Furnishing is 1.04 times less risky than Shandong Mining. It trades about -0.12 of its potential returns per unit of risk. Shandong Mining Machinery is currently generating about -0.43 per unit of risk. If you would invest 1,182 in Zoy Home Furnishing on October 11, 2024 and sell it today you would lose (139.00) from holding Zoy Home Furnishing or give up 11.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zoy Home Furnishing vs. Shandong Mining Machinery
Performance |
| Timeline |
| Zoy Home Furnishing |
| Shandong Mining Machinery |
Zoy Home and Shandong Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zoy Home and Shandong Mining
The main advantage of trading using opposite Zoy Home and Shandong Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoy Home position performs unexpectedly, Shandong Mining 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 Shandong Mining will offset losses from the drop in Shandong Mining's long position.| Zoy Home vs. Ningbo MedicalSystem Biotechnology | Zoy Home vs. Invengo Information Technology | Zoy Home vs. Liaoning Chengda Biotechnology | Zoy Home vs. Bus Online Co |
| Shandong Mining vs. Shanghai Shuixing Home | Shandong Mining vs. DO Home Collection | Shandong Mining vs. Beijing Kingsoft Office | Shandong Mining vs. Zoy Home Furnishing |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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