Correlation Between Zhejiang Yongjin and Hunan Tyen
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By analyzing existing cross correlation between Zhejiang Yongjin Metal and Hunan Tyen Machinery, you can compare the effects of market volatilities on Zhejiang Yongjin and Hunan Tyen 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 Hunan Tyen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Yongjin and Hunan Tyen.
Diversification Opportunities for Zhejiang Yongjin and Hunan Tyen
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Hunan is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Yongjin Metal and Hunan Tyen Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Tyen Machinery 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 Hunan Tyen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Tyen Machinery has no effect on the direction of Zhejiang Yongjin i.e., Zhejiang Yongjin and Hunan Tyen go up and down completely randomly.
Pair Corralation between Zhejiang Yongjin and Hunan Tyen
Assuming the 90 days trading horizon Zhejiang Yongjin Metal is expected to under-perform the Hunan Tyen. But the stock apears to be less risky and, when comparing its historical volatility, Zhejiang Yongjin Metal is 2.23 times less risky than Hunan Tyen. The stock trades about -0.19 of its potential returns per unit of risk. The Hunan Tyen Machinery is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 548.00 in Hunan Tyen Machinery on August 28, 2024 and sell it today you would lose (38.00) from holding Hunan Tyen Machinery or give up 6.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Yongjin Metal vs. Hunan Tyen Machinery
Performance |
| Timeline |
| Zhejiang Yongjin Metal |
| Hunan Tyen Machinery |
Zhejiang Yongjin and Hunan Tyen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Yongjin and Hunan Tyen
The main advantage of trading using opposite Zhejiang Yongjin and Hunan Tyen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Yongjin position performs unexpectedly, Hunan Tyen 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 Hunan Tyen will offset losses from the drop in Hunan Tyen's long position.| Zhejiang Yongjin vs. Wanhua Chemical Group | Zhejiang Yongjin vs. Shandong Gold Mining | Zhejiang Yongjin vs. Rongsheng Petrochemical Co | Zhejiang Yongjin vs. Inner Mongolia BaoTou |
| Hunan Tyen vs. China State Construction | Hunan Tyen vs. Huafa Industrial Co | Hunan Tyen vs. China International Capital | Hunan Tyen vs. Kweichow Moutai Co |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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