Correlation Between Xingguang Agricultural and Zhejiang Daily
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By analyzing existing cross correlation between Xingguang Agricultural Mach and Zhejiang Daily Media, you can compare the effects of market volatilities on Xingguang Agricultural and Zhejiang Daily 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 Xingguang Agricultural with a short position of Zhejiang Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xingguang Agricultural and Zhejiang Daily.
Diversification Opportunities for Xingguang Agricultural and Zhejiang Daily
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xingguang and Zhejiang is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Xingguang Agricultural Mach and Zhejiang Daily Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Daily Media and Xingguang Agricultural 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 Xingguang Agricultural Mach are associated (or correlated) with Zhejiang Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Daily Media has no effect on the direction of Xingguang Agricultural i.e., Xingguang Agricultural and Zhejiang Daily go up and down completely randomly.
Pair Corralation between Xingguang Agricultural and Zhejiang Daily
Assuming the 90 days trading horizon Xingguang Agricultural is expected to generate 1.89 times less return on investment than Zhejiang Daily. In addition to that, Xingguang Agricultural is 1.04 times more volatile than Zhejiang Daily Media. It trades about 0.01 of its total potential returns per unit of risk. Zhejiang Daily Media is currently generating about 0.03 per unit of volatility. If you would invest 874.00 in Zhejiang Daily Media on September 26, 2024 and sell it today you would earn a total of 187.00 from holding Zhejiang Daily Media or generate 21.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xingguang Agricultural Mach vs. Zhejiang Daily Media
Performance |
| Timeline |
| Xingguang Agricultural |
| Zhejiang Daily Media |
Xingguang Agricultural and Zhejiang Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xingguang Agricultural and Zhejiang Daily
The main advantage of trading using opposite Xingguang Agricultural and Zhejiang Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xingguang Agricultural position performs unexpectedly, Zhejiang Daily 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 Daily will offset losses from the drop in Zhejiang Daily's long position.The idea behind Xingguang Agricultural Mach and Zhejiang Daily Media pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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