Correlation Between New Hope and Zhejiang Huatong
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By analyzing existing cross correlation between New Hope Dairy and Zhejiang Huatong Meat, you can compare the effects of market volatilities on New Hope and Zhejiang Huatong 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 New Hope with a short position of Zhejiang Huatong. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Hope and Zhejiang Huatong.
Diversification Opportunities for New Hope and Zhejiang Huatong
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between New and Zhejiang is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding New Hope Dairy and Zhejiang Huatong Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Huatong Meat and New Hope 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 New Hope Dairy are associated (or correlated) with Zhejiang Huatong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Huatong Meat has no effect on the direction of New Hope i.e., New Hope and Zhejiang Huatong go up and down completely randomly.
Pair Corralation between New Hope and Zhejiang Huatong
Assuming the 90 days trading horizon New Hope Dairy is expected to generate 1.0 times more return on investment than Zhejiang Huatong. However, New Hope Dairy is 1.0 times less risky than Zhejiang Huatong. It trades about 0.19 of its potential returns per unit of risk. Zhejiang Huatong Meat is currently generating about 0.11 per unit of risk. If you would invest 961.00 in New Hope Dairy on September 25, 2024 and sell it today you would earn a total of 460.00 from holding New Hope Dairy or generate 47.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
New Hope Dairy vs. Zhejiang Huatong Meat
Performance |
Timeline |
New Hope Dairy |
Zhejiang Huatong Meat |
New Hope and Zhejiang Huatong Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with New Hope and Zhejiang Huatong
The main advantage of trading using opposite New Hope and Zhejiang Huatong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Hope position performs unexpectedly, Zhejiang Huatong 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 Zhejiang Huatong will offset losses from the drop in Zhejiang Huatong's long position.New Hope vs. Jiujiang Shanshui Technology | New Hope vs. Niutech Environment Technology | New Hope vs. Kuang Chi Technologies | New Hope vs. Fujian Newland Computer |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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