Correlation Between Zhejiang Yongjin and Shenzhen Zhongzhuang
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By analyzing existing cross correlation between Zhejiang Yongjin Metal and Shenzhen Zhongzhuang Construction, you can compare the effects of market volatilities on Zhejiang Yongjin and Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Yongjin and Shenzhen Zhongzhuang.
Diversification Opportunities for Zhejiang Yongjin and Shenzhen Zhongzhuang
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zhejiang and Shenzhen is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Yongjin Metal and Shenzhen Zhongzhuang Construct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Zhongzhuang has no effect on the direction of Zhejiang Yongjin i.e., Zhejiang Yongjin and Shenzhen Zhongzhuang go up and down completely randomly.
Pair Corralation between Zhejiang Yongjin and Shenzhen Zhongzhuang
Assuming the 90 days trading horizon Zhejiang Yongjin Metal is expected to under-perform the Shenzhen Zhongzhuang. But the stock apears to be less risky and, when comparing its historical volatility, Zhejiang Yongjin Metal is 1.56 times less risky than Shenzhen Zhongzhuang. The stock trades about -0.01 of its potential returns per unit of risk. The Shenzhen Zhongzhuang Construction is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 421.00 in Shenzhen Zhongzhuang Construction on August 25, 2024 and sell it today you would lose (42.00) from holding Shenzhen Zhongzhuang Construction or give up 9.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Yongjin Metal vs. Shenzhen Zhongzhuang Construct
Performance |
| Timeline |
| Zhejiang Yongjin Metal |
| Shenzhen Zhongzhuang |
Zhejiang Yongjin and Shenzhen Zhongzhuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Yongjin and Shenzhen Zhongzhuang
The main advantage of trading using opposite Zhejiang Yongjin and Shenzhen Zhongzhuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Yongjin position performs unexpectedly, Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang will offset losses from the drop in Shenzhen Zhongzhuang's long position.| Zhejiang Yongjin vs. Xinjiang Beixin RoadBridge | Zhejiang Yongjin vs. RoadMain T Co | Zhejiang Yongjin vs. Longjian Road Bridge | Zhejiang Yongjin vs. Sinocat Environmental Technology |
| Shenzhen Zhongzhuang vs. Chengdu Kanghua Biological | Shenzhen Zhongzhuang vs. Beijing Wantai Biological | Shenzhen Zhongzhuang vs. Suzhou Novoprotein Scientific | Shenzhen Zhongzhuang vs. Aluminum Corp of |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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