Correlation Between Tradegate and ZTE
Can any of the company-specific risk be diversified away by investing in both Tradegate 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 Tradegate and ZTE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tradegate AG Wertpapierhandelsbank and ZTE Corporation, you can compare the effects of market volatilities on Tradegate 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 Tradegate with a short position of ZTE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradegate and ZTE.
Diversification Opportunities for Tradegate and ZTE
Very good diversification
The 3 months correlation between Tradegate and ZTE is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Tradegate AG Wertpapierhandels and ZTE Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZTE Corporation and Tradegate 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 Tradegate AG Wertpapierhandelsbank 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 Tradegate i.e., Tradegate and ZTE go up and down completely randomly.
Pair Corralation between Tradegate and ZTE
Assuming the 90 days horizon Tradegate AG Wertpapierhandelsbank is expected to generate 0.08 times more return on investment than ZTE. However, Tradegate AG Wertpapierhandelsbank is 12.25 times less risky than ZTE. It trades about 0.18 of its potential returns per unit of risk. ZTE Corporation is currently generating about -0.04 per unit of risk. If you would invest 8,750 in Tradegate AG Wertpapierhandelsbank on September 3, 2024 and sell it today you would earn a total of 100.00 from holding Tradegate AG Wertpapierhandelsbank or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tradegate AG Wertpapierhandels vs. ZTE Corp.
Performance |
| Timeline |
| Tradegate AG Wertpap |
| ZTE Corporation |
Tradegate and ZTE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tradegate and ZTE
The main advantage of trading using opposite Tradegate and ZTE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradegate 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.| Tradegate vs. TRADEGATE | Tradegate vs. CARSALESCOM | Tradegate vs. China Resources Beer | Tradegate vs. MARKET VECTR RETAIL |
| ZTE vs. OAKTRSPECLENDNEW | ZTE vs. MI Homes | ZTE vs. Tradegate AG Wertpapierhandelsbank | ZTE vs. American Homes 4 |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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