Correlation Between Zhejiang Orient and Chongqing Zhifei
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By analyzing existing cross correlation between Zhejiang Orient Gene and Chongqing Zhifei Bio, you can compare the effects of market volatilities on Zhejiang Orient and Chongqing Zhifei 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 Chongqing Zhifei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Orient and Chongqing Zhifei.
Diversification Opportunities for Zhejiang Orient and Chongqing Zhifei
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Chongqing is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Orient Gene and Chongqing Zhifei Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Zhifei Bio 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 Chongqing Zhifei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Zhifei Bio has no effect on the direction of Zhejiang Orient i.e., Zhejiang Orient and Chongqing Zhifei go up and down completely randomly.
Pair Corralation between Zhejiang Orient and Chongqing Zhifei
Assuming the 90 days trading horizon Zhejiang Orient is expected to generate 4.65 times less return on investment than Chongqing Zhifei. But when comparing it to its historical volatility, Zhejiang Orient Gene is 1.27 times less risky than Chongqing Zhifei. It trades about 0.01 of its potential returns per unit of risk. Chongqing Zhifei Bio is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,288 in Chongqing Zhifei Bio on November 28, 2024 and sell it today you would earn a total of 322.00 from holding Chongqing Zhifei Bio or generate 14.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.13% |
| Values | Daily Returns |
Zhejiang Orient Gene vs. Chongqing Zhifei Bio
Performance |
| Timeline |
| Zhejiang Orient Gene |
| Chongqing Zhifei Bio |
Zhejiang Orient and Chongqing Zhifei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Orient and Chongqing Zhifei
The main advantage of trading using opposite Zhejiang Orient and Chongqing Zhifei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Orient position performs unexpectedly, Chongqing Zhifei 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 Chongqing Zhifei will offset losses from the drop in Chongqing Zhifei's long position.| Zhejiang Orient vs. XiAn Dagang Road | Zhejiang Orient vs. Highbroad Advanced Material | Zhejiang Orient vs. Xinjiang Beixin RoadBridge | Zhejiang Orient vs. Chongqing Road Bridge |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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