Correlation Between Zhejiang Orient and Jiangxi Lianchuang
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By analyzing existing cross correlation between Zhejiang Orient Gene and Jiangxi Lianchuang Opto electronic, you can compare the effects of market volatilities on Zhejiang Orient and Jiangxi Lianchuang 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 Jiangxi Lianchuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Orient and Jiangxi Lianchuang.
Diversification Opportunities for Zhejiang Orient and Jiangxi Lianchuang
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zhejiang and Jiangxi is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Orient Gene and Jiangxi Lianchuang Opto electr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Lianchuang Opto 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 Jiangxi Lianchuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Lianchuang Opto has no effect on the direction of Zhejiang Orient i.e., Zhejiang Orient and Jiangxi Lianchuang go up and down completely randomly.
Pair Corralation between Zhejiang Orient and Jiangxi Lianchuang
Assuming the 90 days trading horizon Zhejiang Orient Gene is expected to under-perform the Jiangxi Lianchuang. But the stock apears to be less risky and, when comparing its historical volatility, Zhejiang Orient Gene is 1.27 times less risky than Jiangxi Lianchuang. The stock trades about -0.04 of its potential returns per unit of risk. The Jiangxi Lianchuang Opto electronic is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,337 in Jiangxi Lianchuang Opto electronic on September 18, 2024 and sell it today you would earn a total of 103.00 from holding Jiangxi Lianchuang Opto electronic or generate 2.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Zhejiang Orient Gene vs. Jiangxi Lianchuang Opto electr
Performance |
| Timeline |
| Zhejiang Orient Gene |
| Jiangxi Lianchuang Opto |
Zhejiang Orient and Jiangxi Lianchuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Orient and Jiangxi Lianchuang
The main advantage of trading using opposite Zhejiang Orient and Jiangxi Lianchuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Orient position performs unexpectedly, Jiangxi Lianchuang 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 Jiangxi Lianchuang will offset losses from the drop in Jiangxi Lianchuang's long position.| Zhejiang Orient vs. Industrial and Commercial | Zhejiang Orient vs. Kweichow Moutai Co | Zhejiang Orient vs. Agricultural Bank of | Zhejiang Orient vs. China Mobile Limited |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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