Correlation Between Zoy Home and Industrial
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By analyzing existing cross correlation between Zoy Home Furnishing and Industrial and Commercial, you can compare the effects of market volatilities on Zoy Home and Industrial 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 Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoy Home and Industrial.
Diversification Opportunities for Zoy Home and Industrial
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zoy and Industrial is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Zoy Home Furnishing and Industrial and Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial and Commercial 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 Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial and Commercial has no effect on the direction of Zoy Home i.e., Zoy Home and Industrial go up and down completely randomly.
Pair Corralation between Zoy Home and Industrial
Assuming the 90 days trading horizon Zoy Home Furnishing is expected to generate 2.52 times more return on investment than Industrial. However, Zoy Home is 2.52 times more volatile than Industrial and Commercial. It trades about 0.18 of its potential returns per unit of risk. Industrial and Commercial is currently generating about 0.32 per unit of risk. If you would invest 1,087 in Zoy Home Furnishing on September 12, 2024 and sell it today you would earn a total of 95.00 from holding Zoy Home Furnishing or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zoy Home Furnishing vs. Industrial and Commercial
Performance |
| Timeline |
| Zoy Home Furnishing |
| Industrial and Commercial |
Zoy Home and Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zoy Home and Industrial
The main advantage of trading using opposite Zoy Home and Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoy Home position performs unexpectedly, Industrial 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 Industrial will offset losses from the drop in Industrial's long position.| Zoy Home vs. Lutian Machinery Co | Zoy Home vs. PetroChina Co Ltd | Zoy Home vs. Bank of China | Zoy Home vs. Gansu Jiu Steel |
| Industrial vs. Eastroc Beverage Group | Industrial vs. China Publishing Media | Industrial vs. Inly Media Co | Industrial vs. Beijing Sanyuan Foods |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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