Correlation Between Allied Machinery and Zotye Automobile
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By analyzing existing cross correlation between Allied Machinery Co and Zotye Automobile Co, you can compare the effects of market volatilities on Allied Machinery and Zotye Automobile 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 Zotye Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Machinery and Zotye Automobile.
Diversification Opportunities for Allied Machinery and Zotye Automobile
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Allied and Zotye is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Allied Machinery Co and Zotye Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zotye Automobile 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 Zotye Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zotye Automobile has no effect on the direction of Allied Machinery i.e., Allied Machinery and Zotye Automobile go up and down completely randomly.
Pair Corralation between Allied Machinery and Zotye Automobile
Assuming the 90 days trading horizon Allied Machinery Co is expected to generate 0.57 times more return on investment than Zotye Automobile. However, Allied Machinery Co is 1.75 times less risky than Zotye Automobile. It trades about 0.21 of its potential returns per unit of risk. Zotye Automobile Co is currently generating about 0.11 per unit of risk. If you would invest 1,499 in Allied Machinery Co on September 4, 2024 and sell it today you would earn a total of 176.00 from holding Allied Machinery Co or generate 11.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allied Machinery Co vs. Zotye Automobile Co
Performance |
| Timeline |
| Allied Machinery |
| Zotye Automobile |
Allied Machinery and Zotye Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Machinery and Zotye Automobile
The main advantage of trading using opposite Allied Machinery and Zotye Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Machinery position performs unexpectedly, Zotye Automobile 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 Zotye Automobile will offset losses from the drop in Zotye Automobile's long position.| Allied Machinery vs. Chengdu Kanghua Biological | Allied Machinery vs. Beijing Wantai Biological | Allied Machinery vs. Suzhou Novoprotein Scientific | Allied Machinery vs. Aluminum Corp of |
| Zotye Automobile vs. Industrial and Commercial | Zotye Automobile vs. China Construction Bank | Zotye Automobile vs. Agricultural Bank of | Zotye Automobile vs. Bank of China |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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