Correlation Between Zhejiang Yongjin and Central Plains
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By analyzing existing cross correlation between Zhejiang Yongjin Metal and Central Plains Environment, you can compare the effects of market volatilities on Zhejiang Yongjin and Central Plains 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 Yongjin with a short position of Central Plains. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Yongjin and Central Plains.
Diversification Opportunities for Zhejiang Yongjin and Central Plains
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and Central is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Yongjin Metal and Central Plains Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Plains Envir and Zhejiang Yongjin 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 Yongjin Metal are associated (or correlated) with Central Plains. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Plains Envir has no effect on the direction of Zhejiang Yongjin i.e., Zhejiang Yongjin and Central Plains go up and down completely randomly.
Pair Corralation between Zhejiang Yongjin and Central Plains
Assuming the 90 days trading horizon Zhejiang Yongjin Metal is expected to under-perform the Central Plains. In addition to that, Zhejiang Yongjin is 1.13 times more volatile than Central Plains Environment. It trades about -0.04 of its total potential returns per unit of risk. Central Plains Environment is currently generating about 0.04 per unit of volatility. If you would invest 619.00 in Central Plains Environment on October 16, 2024 and sell it today you would earn a total of 192.00 from holding Central Plains Environment or generate 31.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Yongjin Metal vs. Central Plains Environment
Performance |
| Timeline |
| Zhejiang Yongjin Metal |
| Central Plains Envir |
Zhejiang Yongjin and Central Plains Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Yongjin and Central Plains
The main advantage of trading using opposite Zhejiang Yongjin and Central Plains positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Yongjin position performs unexpectedly, Central Plains 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 Central Plains will offset losses from the drop in Central Plains' long position.| Zhejiang Yongjin vs. Zijin Mining Group | Zhejiang Yongjin vs. Wanhua Chemical Group | Zhejiang Yongjin vs. Baoshan Iron Steel | Zhejiang Yongjin vs. Shandong Gold Mining |
| Central Plains vs. Vohringer Home Technology | Central Plains vs. Mango Excellent Media | Central Plains vs. Shandong Homey Aquatic | Central Plains vs. Shanghai Shuixing Home |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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