Correlation Between Zhejiang Yayi and Qinghaihuading Industrial

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Zhejiang Yayi and Qinghaihuading Industrial 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 Zhejiang Yayi and Qinghaihuading Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zhejiang Yayi Metal and Qinghaihuading Industrial Co, you can compare the effects of market volatilities on Zhejiang Yayi and Qinghaihuading Industrial 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 Yayi with a short position of Qinghaihuading Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Yayi and Qinghaihuading Industrial.

Diversification Opportunities for Zhejiang Yayi and Qinghaihuading Industrial

0.75
  Correlation Coefficient

Poor diversification

The 3 months correlation between Zhejiang and Qinghaihuading is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Yayi Metal and Qinghaihuading Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qinghaihuading Industrial and Zhejiang Yayi 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 Yayi Metal are associated (or correlated) with Qinghaihuading Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qinghaihuading Industrial has no effect on the direction of Zhejiang Yayi i.e., Zhejiang Yayi and Qinghaihuading Industrial go up and down completely randomly.

Pair Corralation between Zhejiang Yayi and Qinghaihuading Industrial

Assuming the 90 days trading horizon Zhejiang Yayi Metal is expected to generate 1.01 times more return on investment than Qinghaihuading Industrial. However, Zhejiang Yayi is 1.01 times more volatile than Qinghaihuading Industrial Co. It trades about 0.16 of its potential returns per unit of risk. Qinghaihuading Industrial Co is currently generating about 0.12 per unit of risk. If you would invest  1,835  in Zhejiang Yayi Metal on September 23, 2024 and sell it today you would earn a total of  812.00  from holding Zhejiang Yayi Metal or generate 44.25% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Zhejiang Yayi Metal  vs.  Qinghaihuading Industrial Co

 Performance 
       Timeline  
Zhejiang Yayi Metal 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Zhejiang Yayi Metal are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Zhejiang Yayi sustained solid returns over the last few months and may actually be approaching a breakup point.
Qinghaihuading Industrial 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Qinghaihuading Industrial Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Qinghaihuading Industrial sustained solid returns over the last few months and may actually be approaching a breakup point.

Zhejiang Yayi and Qinghaihuading Industrial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Zhejiang Yayi and Qinghaihuading Industrial

The main advantage of trading using opposite Zhejiang Yayi and Qinghaihuading Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Yayi position performs unexpectedly, Qinghaihuading Industrial 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 Qinghaihuading Industrial will offset losses from the drop in Qinghaihuading Industrial's long position.
The idea behind Zhejiang Yayi Metal and Qinghaihuading Industrial Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.

Other Complementary Tools

Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Equity Valuation
Check real value of public entities based on technical and fundamental data
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets