Correlation Between Liaoning Chengda and Zhejiang Publishing
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By analyzing existing cross correlation between Liaoning Chengda Biotechnology and Zhejiang Publishing Media, you can compare the effects of market volatilities on Liaoning Chengda and Zhejiang Publishing 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 Liaoning Chengda with a short position of Zhejiang Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Chengda and Zhejiang Publishing.
Diversification Opportunities for Liaoning Chengda and Zhejiang Publishing
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Liaoning and Zhejiang is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Chengda Biotechnology and Zhejiang Publishing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Publishing Media and Liaoning Chengda 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 Liaoning Chengda Biotechnology are associated (or correlated) with Zhejiang Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Publishing Media has no effect on the direction of Liaoning Chengda i.e., Liaoning Chengda and Zhejiang Publishing go up and down completely randomly.
Pair Corralation between Liaoning Chengda and Zhejiang Publishing
Assuming the 90 days trading horizon Liaoning Chengda Biotechnology is expected to generate 1.15 times more return on investment than Zhejiang Publishing. However, Liaoning Chengda is 1.15 times more volatile than Zhejiang Publishing Media. It trades about 0.17 of its potential returns per unit of risk. Zhejiang Publishing Media is currently generating about -0.05 per unit of risk. If you would invest 2,499 in Liaoning Chengda Biotechnology on November 7, 2024 and sell it today you would earn a total of 91.00 from holding Liaoning Chengda Biotechnology or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Chengda Biotechnology vs. Zhejiang Publishing Media
Performance |
| Timeline |
| Liaoning Chengda Bio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Zhejiang Publishing Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Liaoning Chengda and Zhejiang Publishing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Chengda and Zhejiang Publishing
The main advantage of trading using opposite Liaoning Chengda and Zhejiang Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Chengda position performs unexpectedly, Zhejiang Publishing 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 Zhejiang Publishing will offset losses from the drop in Zhejiang Publishing's long position.The idea behind Liaoning Chengda Biotechnology and Zhejiang Publishing Media 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.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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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