Correlation Between Allied Machinery and Zhejiang Qianjiang
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By analyzing existing cross correlation between Allied Machinery Co and Zhejiang Qianjiang Motorcycle, you can compare the effects of market volatilities on Allied Machinery and Zhejiang Qianjiang 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 Allied Machinery with a short position of Zhejiang Qianjiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Machinery and Zhejiang Qianjiang.
Diversification Opportunities for Allied Machinery and Zhejiang Qianjiang
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Allied and Zhejiang is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Allied Machinery Co and Zhejiang Qianjiang Motorcycle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Qianjiang and Allied Machinery 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 Allied Machinery Co are associated (or correlated) with Zhejiang Qianjiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Qianjiang has no effect on the direction of Allied Machinery i.e., Allied Machinery and Zhejiang Qianjiang go up and down completely randomly.
Pair Corralation between Allied Machinery and Zhejiang Qianjiang
Assuming the 90 days trading horizon Allied Machinery Co is expected to generate 0.96 times more return on investment than Zhejiang Qianjiang. However, Allied Machinery Co is 1.05 times less risky than Zhejiang Qianjiang. It trades about 0.13 of its potential returns per unit of risk. Zhejiang Qianjiang Motorcycle is currently generating about -0.16 per unit of risk. If you would invest 1,539 in Allied Machinery Co on August 29, 2024 and sell it today you would earn a total of 101.00 from holding Allied Machinery Co or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allied Machinery Co vs. Zhejiang Qianjiang Motorcycle
Performance |
| Timeline |
| Allied Machinery |
| Zhejiang Qianjiang |
Allied Machinery and Zhejiang Qianjiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Machinery and Zhejiang Qianjiang
The main advantage of trading using opposite Allied Machinery and Zhejiang Qianjiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Machinery position performs unexpectedly, Zhejiang Qianjiang 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 Zhejiang Qianjiang will offset losses from the drop in Zhejiang Qianjiang's long position.| Allied Machinery vs. Biwin Storage Technology | Allied Machinery vs. PetroChina Co Ltd | Allied Machinery vs. Industrial and Commercial | Allied Machinery vs. China Construction Bank |
| Zhejiang Qianjiang vs. Changchun UP Optotech | Zhejiang Qianjiang vs. Dymatic Chemicals | Zhejiang Qianjiang vs. Kuangda Technology Group | Zhejiang Qianjiang vs. Shandong Polymer Biochemicals |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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