Correlation Between Zhongyin Babi and Gansu Huangtai
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By analyzing existing cross correlation between Zhongyin Babi Food and Gansu Huangtai Wine marketing, you can compare the effects of market volatilities on Zhongyin Babi and Gansu Huangtai 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 Zhongyin Babi with a short position of Gansu Huangtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongyin Babi and Gansu Huangtai.
Diversification Opportunities for Zhongyin Babi and Gansu Huangtai
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Zhongyin and Gansu is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Zhongyin Babi Food and Gansu Huangtai Wine marketing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gansu Huangtai Wine and Zhongyin Babi 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 Zhongyin Babi Food are associated (or correlated) with Gansu Huangtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gansu Huangtai Wine has no effect on the direction of Zhongyin Babi i.e., Zhongyin Babi and Gansu Huangtai go up and down completely randomly.
Pair Corralation between Zhongyin Babi and Gansu Huangtai
Assuming the 90 days trading horizon Zhongyin Babi is expected to generate 1.65 times less return on investment than Gansu Huangtai. But when comparing it to its historical volatility, Zhongyin Babi Food is 2.16 times less risky than Gansu Huangtai. It trades about 0.07 of its potential returns per unit of risk. Gansu Huangtai Wine marketing is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,410 in Gansu Huangtai Wine marketing on August 30, 2024 and sell it today you would earn a total of 46.00 from holding Gansu Huangtai Wine marketing or generate 3.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongyin Babi Food vs. Gansu Huangtai Wine marketing
Performance |
| Timeline |
| Zhongyin Babi Food |
| Gansu Huangtai Wine |
Zhongyin Babi and Gansu Huangtai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongyin Babi and Gansu Huangtai
The main advantage of trading using opposite Zhongyin Babi and Gansu Huangtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongyin Babi position performs unexpectedly, Gansu Huangtai 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 Gansu Huangtai will offset losses from the drop in Gansu Huangtai's long position.| Zhongyin Babi vs. Industrial and Commercial | Zhongyin Babi vs. China Construction Bank | Zhongyin Babi vs. Agricultural Bank of | Zhongyin Babi vs. Bank of China |
| Gansu Huangtai vs. Agricultural Bank of | Gansu Huangtai vs. Industrial and Commercial | Gansu Huangtai vs. Bank of China | Gansu Huangtai vs. PetroChina Co Ltd |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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