Correlation Between Hubei Geoway and Zhejiang Construction
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By analyzing existing cross correlation between Hubei Geoway Investment and Zhejiang Construction Investment, you can compare the effects of market volatilities on Hubei Geoway and Zhejiang Construction 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 Hubei Geoway with a short position of Zhejiang Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Geoway and Zhejiang Construction.
Diversification Opportunities for Hubei Geoway and Zhejiang Construction
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hubei and Zhejiang is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Geoway Investment and Zhejiang Construction Investme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Construction and Hubei Geoway 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 Hubei Geoway Investment are associated (or correlated) with Zhejiang Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Construction has no effect on the direction of Hubei Geoway i.e., Hubei Geoway and Zhejiang Construction go up and down completely randomly.
Pair Corralation between Hubei Geoway and Zhejiang Construction
Assuming the 90 days trading horizon Hubei Geoway Investment is expected to generate 1.0 times more return on investment than Zhejiang Construction. However, Hubei Geoway Investment is 1.0 times less risky than Zhejiang Construction. It trades about 0.28 of its potential returns per unit of risk. Zhejiang Construction Investment is currently generating about -0.29 per unit of risk. If you would invest 147.00 in Hubei Geoway Investment on September 24, 2024 and sell it today you would earn a total of 28.00 from holding Hubei Geoway Investment or generate 19.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hubei Geoway Investment vs. Zhejiang Construction Investme
Performance |
Timeline |
Hubei Geoway Investment |
Zhejiang Construction |
Hubei Geoway and Zhejiang Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hubei Geoway and Zhejiang Construction
The main advantage of trading using opposite Hubei Geoway and Zhejiang Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Geoway position performs unexpectedly, Zhejiang Construction 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 Construction will offset losses from the drop in Zhejiang Construction's long position.Hubei Geoway vs. Zijin Mining Group | Hubei Geoway vs. Wanhua Chemical Group | Hubei Geoway vs. Baoshan Iron Steel | Hubei Geoway vs. Shandong Gold Mining |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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