Correlation Between Zhejiang Yongjin and Guangxi Wuzhou
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By analyzing existing cross correlation between Zhejiang Yongjin Metal and Guangxi Wuzhou Communications, you can compare the effects of market volatilities on Zhejiang Yongjin and Guangxi Wuzhou 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 Guangxi Wuzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Yongjin and Guangxi Wuzhou.
Diversification Opportunities for Zhejiang Yongjin and Guangxi Wuzhou
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zhejiang and Guangxi is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Yongjin Metal and Guangxi Wuzhou Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangxi Wuzhou Commu 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 Guangxi Wuzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangxi Wuzhou Commu has no effect on the direction of Zhejiang Yongjin i.e., Zhejiang Yongjin and Guangxi Wuzhou go up and down completely randomly.
Pair Corralation between Zhejiang Yongjin and Guangxi Wuzhou
Assuming the 90 days trading horizon Zhejiang Yongjin Metal is expected to under-perform the Guangxi Wuzhou. But the stock apears to be less risky and, when comparing its historical volatility, Zhejiang Yongjin Metal is 1.93 times less risky than Guangxi Wuzhou. The stock trades about -0.01 of its potential returns per unit of risk. The Guangxi Wuzhou Communications is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 382.00 in Guangxi Wuzhou Communications on October 26, 2024 and sell it today you would earn a total of 58.00 from holding Guangxi Wuzhou Communications or generate 15.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Yongjin Metal vs. Guangxi Wuzhou Communications
Performance |
| Timeline |
| Zhejiang Yongjin Metal |
| Guangxi Wuzhou Commu |
Zhejiang Yongjin and Guangxi Wuzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Yongjin and Guangxi Wuzhou
The main advantage of trading using opposite Zhejiang Yongjin and Guangxi Wuzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Yongjin position performs unexpectedly, Guangxi Wuzhou 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 Guangxi Wuzhou will offset losses from the drop in Guangxi Wuzhou'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 |
| Guangxi Wuzhou vs. Zhejiang Yongjin Metal | Guangxi Wuzhou vs. Chinese Universe Publishing | Guangxi Wuzhou vs. Qtone Education Group | Guangxi Wuzhou vs. Shanghai Action Education |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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