Correlation Between Suzhou Weizhixiang and DO Home
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By analyzing existing cross correlation between Suzhou Weizhixiang Food and DO Home Collection, you can compare the effects of market volatilities on Suzhou Weizhixiang and DO Home 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 Suzhou Weizhixiang with a short position of DO Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suzhou Weizhixiang and DO Home.
Diversification Opportunities for Suzhou Weizhixiang and DO Home
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Suzhou and 002798 is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Suzhou Weizhixiang Food and DO Home Collection in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DO Home Collection and Suzhou Weizhixiang 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 Suzhou Weizhixiang Food are associated (or correlated) with DO Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DO Home Collection has no effect on the direction of Suzhou Weizhixiang i.e., Suzhou Weizhixiang and DO Home go up and down completely randomly.
Pair Corralation between Suzhou Weizhixiang and DO Home
Assuming the 90 days trading horizon Suzhou Weizhixiang Food is expected to under-perform the DO Home. But the stock apears to be less risky and, when comparing its historical volatility, Suzhou Weizhixiang Food is 1.74 times less risky than DO Home. The stock trades about -0.23 of its potential returns per unit of risk. The DO Home Collection is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 436.00 in DO Home Collection on October 20, 2024 and sell it today you would lose (70.00) from holding DO Home Collection or give up 16.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suzhou Weizhixiang Food vs. DO Home Collection
Performance |
| Timeline |
| Suzhou Weizhixiang Food |
| DO Home Collection |
Suzhou Weizhixiang and DO Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suzhou Weizhixiang and DO Home
The main advantage of trading using opposite Suzhou Weizhixiang and DO Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suzhou Weizhixiang position performs unexpectedly, DO Home 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 DO Home will offset losses from the drop in DO Home's long position.The idea behind Suzhou Weizhixiang Food and DO Home Collection pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| DO Home vs. Suzhou Weizhixiang Food | DO Home vs. Eastroc Beverage Group | DO Home vs. Hubei Forbon Technology | DO Home vs. Iat Automobile Technology |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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