Correlation Between Zhejiang Orient and Zoomlion Heavy
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By analyzing existing cross correlation between Zhejiang Orient Gene and Zoomlion Heavy Industry, you can compare the effects of market volatilities on Zhejiang Orient and Zoomlion Heavy 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 Orient with a short position of Zoomlion Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Orient and Zoomlion Heavy.
Diversification Opportunities for Zhejiang Orient and Zoomlion Heavy
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Zhejiang and Zoomlion is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Orient Gene and Zoomlion Heavy Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoomlion Heavy Industry and Zhejiang Orient 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 Orient Gene are associated (or correlated) with Zoomlion Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoomlion Heavy Industry has no effect on the direction of Zhejiang Orient i.e., Zhejiang Orient and Zoomlion Heavy go up and down completely randomly.
Pair Corralation between Zhejiang Orient and Zoomlion Heavy
Assuming the 90 days trading horizon Zhejiang Orient Gene is expected to under-perform the Zoomlion Heavy. In addition to that, Zhejiang Orient is 1.45 times more volatile than Zoomlion Heavy Industry. It trades about -0.05 of its total potential returns per unit of risk. Zoomlion Heavy Industry is currently generating about 0.04 per unit of volatility. If you would invest 534.00 in Zoomlion Heavy Industry on October 15, 2024 and sell it today you would earn a total of 139.00 from holding Zoomlion Heavy Industry or generate 26.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Orient Gene vs. Zoomlion Heavy Industry
Performance |
| Timeline |
| Zhejiang Orient Gene |
| Zoomlion Heavy Industry |
Zhejiang Orient and Zoomlion Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Orient and Zoomlion Heavy
The main advantage of trading using opposite Zhejiang Orient and Zoomlion Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Orient position performs unexpectedly, Zoomlion Heavy 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 Zoomlion Heavy will offset losses from the drop in Zoomlion Heavy's long position.| Zhejiang Orient vs. Ciwen Media Co | Zhejiang Orient vs. Anhui Xinhua Media | Zhejiang Orient vs. Runjian Communication Co | Zhejiang Orient vs. Duzhe Publishing Media |
| Zoomlion Heavy vs. Southern PublishingMedia Co | Zoomlion Heavy vs. Shenzhen SDG Information | Zoomlion Heavy vs. Dawning Information Industry | Zoomlion Heavy vs. Sportsoul 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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