Correlation Between Zhejiang Yongjin and Sichuan Jinshi
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By analyzing existing cross correlation between Zhejiang Yongjin Metal and Sichuan Jinshi Technology, you can compare the effects of market volatilities on Zhejiang Yongjin and Sichuan Jinshi 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 Sichuan Jinshi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Yongjin and Sichuan Jinshi.
Diversification Opportunities for Zhejiang Yongjin and Sichuan Jinshi
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Zhejiang and Sichuan is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Yongjin Metal and Sichuan Jinshi Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Jinshi Technology 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 Sichuan Jinshi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Jinshi Technology has no effect on the direction of Zhejiang Yongjin i.e., Zhejiang Yongjin and Sichuan Jinshi go up and down completely randomly.
Pair Corralation between Zhejiang Yongjin and Sichuan Jinshi
Assuming the 90 days trading horizon Zhejiang Yongjin Metal is expected to under-perform the Sichuan Jinshi. But the stock apears to be less risky and, when comparing its historical volatility, Zhejiang Yongjin Metal is 1.39 times less risky than Sichuan Jinshi. The stock trades about -0.26 of its potential returns per unit of risk. The Sichuan Jinshi Technology is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 759.00 in Sichuan Jinshi Technology on October 12, 2024 and sell it today you would lose (77.00) from holding Sichuan Jinshi Technology or give up 10.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Yongjin Metal vs. Sichuan Jinshi Technology
Performance |
| Timeline |
| Zhejiang Yongjin Metal |
| Sichuan Jinshi Technology |
Zhejiang Yongjin and Sichuan Jinshi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Yongjin and Sichuan Jinshi
The main advantage of trading using opposite Zhejiang Yongjin and Sichuan Jinshi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Yongjin position performs unexpectedly, Sichuan Jinshi 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 Sichuan Jinshi will offset losses from the drop in Sichuan Jinshi's 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 |
| Sichuan Jinshi vs. Zhejiang Yongjin Metal | Sichuan Jinshi vs. Tongling Nonferrous Metals | Sichuan Jinshi vs. Beijing Sanyuan Foods | Sichuan Jinshi vs. Eastroc Beverage Group |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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