Correlation Between Zhejiang Huayou and Jiangxi Ganfeng
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By analyzing existing cross correlation between Zhejiang Huayou Cobalt and Jiangxi Ganfeng Lithium, you can compare the effects of market volatilities on Zhejiang Huayou and Jiangxi Ganfeng 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 Zhejiang Huayou with a short position of Jiangxi Ganfeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Huayou and Jiangxi Ganfeng.
Diversification Opportunities for Zhejiang Huayou and Jiangxi Ganfeng
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and Jiangxi is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Huayou Cobalt and Jiangxi Ganfeng Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Ganfeng Lithium and Zhejiang Huayou 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 Zhejiang Huayou Cobalt are associated (or correlated) with Jiangxi Ganfeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Ganfeng Lithium has no effect on the direction of Zhejiang Huayou i.e., Zhejiang Huayou and Jiangxi Ganfeng go up and down completely randomly.
Pair Corralation between Zhejiang Huayou and Jiangxi Ganfeng
Assuming the 90 days trading horizon Zhejiang Huayou Cobalt is expected to generate 0.84 times more return on investment than Jiangxi Ganfeng. However, Zhejiang Huayou Cobalt is 1.2 times less risky than Jiangxi Ganfeng. It trades about -0.15 of its potential returns per unit of risk. Jiangxi Ganfeng Lithium is currently generating about -0.3 per unit of risk. If you would invest 3,234 in Zhejiang Huayou Cobalt on October 30, 2024 and sell it today you would lose (312.00) from holding Zhejiang Huayou Cobalt or give up 9.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Huayou Cobalt vs. Jiangxi Ganfeng Lithium
Performance |
| Timeline |
| Zhejiang Huayou Cobalt |
| Jiangxi Ganfeng Lithium |
Zhejiang Huayou and Jiangxi Ganfeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Huayou and Jiangxi Ganfeng
The main advantage of trading using opposite Zhejiang Huayou and Jiangxi Ganfeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Huayou position performs unexpectedly, Jiangxi Ganfeng 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 Jiangxi Ganfeng will offset losses from the drop in Jiangxi Ganfeng's long position.| Zhejiang Huayou vs. Zijin Mining Group | Zhejiang Huayou vs. Wanhua Chemical Group | Zhejiang Huayou vs. Baoshan Iron Steel | Zhejiang Huayou vs. Shandong Gold Mining |
| Jiangxi Ganfeng vs. Offcn Education Technology | Jiangxi Ganfeng vs. Southern PublishingMedia Co | Jiangxi Ganfeng vs. Heilongjiang Publishing Media | Jiangxi Ganfeng vs. Duzhe Publishing Media |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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