Correlation Between Zhejiang Kingland and Xiangyang Automobile
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By analyzing existing cross correlation between Zhejiang Kingland Pipeline and Xiangyang Automobile Bearing, you can compare the effects of market volatilities on Zhejiang Kingland and Xiangyang Automobile 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 Zhejiang Kingland with a short position of Xiangyang Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Kingland and Xiangyang Automobile.
Diversification Opportunities for Zhejiang Kingland and Xiangyang Automobile
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and Xiangyang is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Kingland Pipeline and Xiangyang Automobile Bearing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiangyang Automobile and Zhejiang Kingland 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 Zhejiang Kingland Pipeline are associated (or correlated) with Xiangyang Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiangyang Automobile has no effect on the direction of Zhejiang Kingland i.e., Zhejiang Kingland and Xiangyang Automobile go up and down completely randomly.
Pair Corralation between Zhejiang Kingland and Xiangyang Automobile
Assuming the 90 days trading horizon Zhejiang Kingland is expected to generate 2.22 times less return on investment than Xiangyang Automobile. But when comparing it to its historical volatility, Zhejiang Kingland Pipeline is 1.55 times less risky than Xiangyang Automobile. It trades about 0.16 of its potential returns per unit of risk. Xiangyang Automobile Bearing is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 441.00 in Xiangyang Automobile Bearing on September 11, 2024 and sell it today you would earn a total of 267.00 from holding Xiangyang Automobile Bearing or generate 60.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Zhejiang Kingland Pipeline vs. Xiangyang Automobile Bearing
Performance |
Timeline |
Zhejiang Kingland |
Xiangyang Automobile |
Zhejiang Kingland and Xiangyang Automobile Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zhejiang Kingland and Xiangyang Automobile
The main advantage of trading using opposite Zhejiang Kingland and Xiangyang Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Kingland position performs unexpectedly, Xiangyang Automobile 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 Xiangyang Automobile will offset losses from the drop in Xiangyang Automobile's long position.Zhejiang Kingland vs. China Mobile Limited | Zhejiang Kingland vs. Sinomach General Machinery | Zhejiang Kingland vs. Xiangyang Automobile Bearing | Zhejiang Kingland vs. Allied Machinery Co |
Xiangyang Automobile vs. Lutian Machinery Co | Xiangyang Automobile vs. China Longyuan Power | Xiangyang Automobile vs. PetroChina Co Ltd | Xiangyang Automobile vs. Bank of China |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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