Correlation Between Dazhong Transportation and Jiaozuo Wanfang
Specify exactly 2 symbols:
By analyzing existing cross correlation between Dazhong Transportation Group and Jiaozuo Wanfang Aluminum, you can compare the effects of market volatilities on Dazhong Transportation and Jiaozuo Wanfang 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 Dazhong Transportation with a short position of Jiaozuo Wanfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dazhong Transportation and Jiaozuo Wanfang.
Diversification Opportunities for Dazhong Transportation and Jiaozuo Wanfang
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dazhong and Jiaozuo is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Dazhong Transportation Group and Jiaozuo Wanfang Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiaozuo Wanfang Aluminum and Dazhong Transportation 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 Dazhong Transportation Group are associated (or correlated) with Jiaozuo Wanfang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiaozuo Wanfang Aluminum has no effect on the direction of Dazhong Transportation i.e., Dazhong Transportation and Jiaozuo Wanfang go up and down completely randomly.
Pair Corralation between Dazhong Transportation and Jiaozuo Wanfang
Assuming the 90 days trading horizon Dazhong Transportation Group is expected to generate 0.93 times more return on investment than Jiaozuo Wanfang. However, Dazhong Transportation Group is 1.07 times less risky than Jiaozuo Wanfang. It trades about 0.08 of its potential returns per unit of risk. Jiaozuo Wanfang Aluminum is currently generating about -0.14 per unit of risk. If you would invest 25.00 in Dazhong Transportation Group on September 1, 2024 and sell it today you would earn a total of 1.00 from holding Dazhong Transportation Group or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dazhong Transportation Group vs. Jiaozuo Wanfang Aluminum
Performance |
| Timeline |
| Dazhong Transportation |
| Jiaozuo Wanfang Aluminum |
Dazhong Transportation and Jiaozuo Wanfang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dazhong Transportation and Jiaozuo Wanfang
The main advantage of trading using opposite Dazhong Transportation and Jiaozuo Wanfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dazhong Transportation position performs unexpectedly, Jiaozuo Wanfang 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 Jiaozuo Wanfang will offset losses from the drop in Jiaozuo Wanfang's long position.The idea behind Dazhong Transportation Group and Jiaozuo Wanfang Aluminum 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.
| Jiaozuo Wanfang vs. Zijin Mining Group | Jiaozuo Wanfang vs. Wanhua Chemical Group | Jiaozuo Wanfang vs. Baoshan Iron Steel | Jiaozuo Wanfang vs. Shandong Gold Mining |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |