Correlation Between Liaoning Chengda and Zoy Home
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By analyzing existing cross correlation between Liaoning Chengda Biotechnology and Zoy Home Furnishing, you can compare the effects of market volatilities on Liaoning Chengda and Zoy Home 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 Zoy Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Chengda and Zoy Home.
Diversification Opportunities for Liaoning Chengda and Zoy Home
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Liaoning and Zoy is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Chengda Biotechnology and Zoy Home Furnishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoy Home Furnishing 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 Zoy Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoy Home Furnishing has no effect on the direction of Liaoning Chengda i.e., Liaoning Chengda and Zoy Home go up and down completely randomly.
Pair Corralation between Liaoning Chengda and Zoy Home
Assuming the 90 days trading horizon Liaoning Chengda Biotechnology is expected to under-perform the Zoy Home. But the stock apears to be less risky and, when comparing its historical volatility, Liaoning Chengda Biotechnology is 4.35 times less risky than Zoy Home. The stock trades about -0.56 of its potential returns per unit of risk. The Zoy Home Furnishing is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 1,182 in Zoy Home Furnishing on October 11, 2024 and sell it today you would lose (139.00) from holding Zoy Home Furnishing or give up 11.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Chengda Biotechnology vs. Zoy Home Furnishing
Performance |
| Timeline |
| Liaoning Chengda Bio |
| Zoy Home Furnishing |
Liaoning Chengda and Zoy Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Chengda and Zoy Home
The main advantage of trading using opposite Liaoning Chengda and Zoy Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Chengda position performs unexpectedly, Zoy Home 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 Zoy Home will offset losses from the drop in Zoy Home's long position.| Liaoning Chengda vs. Sichuan Hebang Biotechnology | Liaoning Chengda vs. Anhui Huilong Agricultural | Liaoning Chengda vs. Miracll Chemicals Co | Liaoning Chengda vs. Guangzhou KDT Machinery |
| Zoy Home vs. Guangzhou Tinci Materials | Zoy Home vs. Ningbo Tip Rubber | Zoy Home vs. King Strong New Material | Zoy Home vs. GreenTech Environmental Co |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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