Correlation Between H2O Retailing and ZhongAn Online
Can any of the company-specific risk be diversified away by investing in both H2O Retailing and ZhongAn Online 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 H2O Retailing and ZhongAn Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H2O Retailing and ZhongAn Online P, you can compare the effects of market volatilities on H2O Retailing and ZhongAn Online 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 H2O Retailing with a short position of ZhongAn Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of H2O Retailing and ZhongAn Online.
Diversification Opportunities for H2O Retailing and ZhongAn Online
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between H2O and ZhongAn is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding H2O Retailing and ZhongAn Online P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZhongAn Online P and H2O Retailing 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 H2O Retailing are associated (or correlated) with ZhongAn Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZhongAn Online P has no effect on the direction of H2O Retailing i.e., H2O Retailing and ZhongAn Online go up and down completely randomly.
Pair Corralation between H2O Retailing and ZhongAn Online
Assuming the 90 days horizon H2O Retailing is expected to generate 0.58 times more return on investment than ZhongAn Online. However, H2O Retailing is 1.73 times less risky than ZhongAn Online. It trades about 0.18 of its potential returns per unit of risk. ZhongAn Online P is currently generating about -0.07 per unit of risk. If you would invest 1,240 in H2O Retailing on October 23, 2024 and sell it today you would earn a total of 130.00 from holding H2O Retailing or generate 10.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
H2O Retailing vs. ZhongAn Online P
Performance |
| Timeline |
| H2O Retailing |
| ZhongAn Online P |
H2O Retailing and ZhongAn Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H2O Retailing and ZhongAn Online
The main advantage of trading using opposite H2O Retailing and ZhongAn Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H2O Retailing position performs unexpectedly, ZhongAn Online 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 ZhongAn Online will offset losses from the drop in ZhongAn Online's long position.| H2O Retailing vs. Aeon Co | H2O Retailing vs. Dillards | H2O Retailing vs. Macys Inc | H2O Retailing vs. RYOHIN UNSPADR1 |
| ZhongAn Online vs. Titan Machinery | ZhongAn Online vs. Siemens Healthineers AG | ZhongAn Online vs. Federal Agricultural Mortgage | ZhongAn Online vs. Dairy Farm International |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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