Correlation Between ALBIS LEASING and ZTE
Can any of the company-specific risk be diversified away by investing in both ALBIS LEASING and ZTE at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ALBIS LEASING and ZTE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALBIS LEASING AG and ZTE Corporation, you can compare the effects of market volatilities on ALBIS LEASING and ZTE 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 ALBIS LEASING with a short position of ZTE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALBIS LEASING and ZTE.
Diversification Opportunities for ALBIS LEASING and ZTE
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ALBIS and ZTE is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding ALBIS LEASING AG and ZTE Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZTE Corporation and ALBIS LEASING 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 ALBIS LEASING AG are associated (or correlated) with ZTE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZTE Corporation has no effect on the direction of ALBIS LEASING i.e., ALBIS LEASING and ZTE go up and down completely randomly.
Pair Corralation between ALBIS LEASING and ZTE
Assuming the 90 days trading horizon ALBIS LEASING is expected to generate 3.53 times less return on investment than ZTE. But when comparing it to its historical volatility, ALBIS LEASING AG is 4.53 times less risky than ZTE. It trades about 0.07 of its potential returns per unit of risk. ZTE Corporation is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 123.00 in ZTE Corporation on October 12, 2024 and sell it today you would earn a total of 141.00 from holding ZTE Corporation or generate 114.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALBIS LEASING AG vs. ZTE Corp.
Performance |
| Timeline |
| ALBIS LEASING AG |
| ZTE Corporation |
ALBIS LEASING and ZTE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALBIS LEASING and ZTE
The main advantage of trading using opposite ALBIS LEASING and ZTE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALBIS LEASING position performs unexpectedly, ZTE 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 ZTE will offset losses from the drop in ZTE's long position.| ALBIS LEASING vs. Broadridge Financial Solutions | ALBIS LEASING vs. Air Lease | ALBIS LEASING vs. WILLIS LEASE FIN | ALBIS LEASING vs. FUYO GENERAL LEASE |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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