Correlation Between Zhong Yang and Scully Royalty
Can any of the company-specific risk be diversified away by investing in both Zhong Yang and Scully Royalty 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 Zhong Yang and Scully Royalty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zhong Yang Financial and Scully Royalty, you can compare the effects of market volatilities on Zhong Yang and Scully Royalty 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 Zhong Yang with a short position of Scully Royalty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhong Yang and Scully Royalty.
Diversification Opportunities for Zhong Yang and Scully Royalty
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zhong and Scully is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Zhong Yang Financial and Scully Royalty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scully Royalty and Zhong Yang 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 Zhong Yang Financial are associated (or correlated) with Scully Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scully Royalty has no effect on the direction of Zhong Yang i.e., Zhong Yang and Scully Royalty go up and down completely randomly.
Pair Corralation between Zhong Yang and Scully Royalty
Considering the 90-day investment horizon Zhong Yang Financial is expected to generate 1.31 times more return on investment than Scully Royalty. However, Zhong Yang is 1.31 times more volatile than Scully Royalty. It trades about -0.04 of its potential returns per unit of risk. Scully Royalty is currently generating about -0.19 per unit of risk. If you would invest 172.00 in Zhong Yang Financial on September 12, 2024 and sell it today you would lose (6.00) from holding Zhong Yang Financial or give up 3.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhong Yang Financial vs. Scully Royalty
Performance |
| Timeline |
| Zhong Yang Financial |
| Scully Royalty |
Zhong Yang and Scully Royalty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhong Yang and Scully Royalty
The main advantage of trading using opposite Zhong Yang and Scully Royalty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhong Yang position performs unexpectedly, Scully Royalty 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 Scully Royalty will offset losses from the drop in Scully Royalty's long position.| Zhong Yang vs. Scully Royalty | Zhong Yang vs. Oppenheimer Holdings | Zhong Yang vs. Houlihan Lokey | Zhong Yang vs. Stonex Group |
| Scully Royalty vs. Applied Blockchain | Scully Royalty vs. Zhong Yang Financial | Scully Royalty vs. Magic Empire Global | Scully Royalty vs. Lazard |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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