Correlation Between Qijing Machinery and Zhejiang Juhua
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By analyzing existing cross correlation between Qijing Machinery and Zhejiang Juhua Co, you can compare the effects of market volatilities on Qijing Machinery and Zhejiang Juhua 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 Qijing Machinery with a short position of Zhejiang Juhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qijing Machinery and Zhejiang Juhua.
Diversification Opportunities for Qijing Machinery and Zhejiang Juhua
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Qijing and Zhejiang is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Qijing Machinery and Zhejiang Juhua Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Juhua and Qijing Machinery 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 Qijing Machinery are associated (or correlated) with Zhejiang Juhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Juhua has no effect on the direction of Qijing Machinery i.e., Qijing Machinery and Zhejiang Juhua go up and down completely randomly.
Pair Corralation between Qijing Machinery and Zhejiang Juhua
Assuming the 90 days trading horizon Qijing Machinery is expected to generate 1.09 times more return on investment than Zhejiang Juhua. However, Qijing Machinery is 1.09 times more volatile than Zhejiang Juhua Co. It trades about 0.16 of its potential returns per unit of risk. Zhejiang Juhua Co is currently generating about 0.17 per unit of risk. If you would invest 1,060 in Qijing Machinery on September 24, 2024 and sell it today you would earn a total of 332.00 from holding Qijing Machinery or generate 31.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Qijing Machinery vs. Zhejiang Juhua Co
Performance |
Timeline |
Qijing Machinery |
Zhejiang Juhua |
Qijing Machinery and Zhejiang Juhua Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Qijing Machinery and Zhejiang Juhua
The main advantage of trading using opposite Qijing Machinery and Zhejiang Juhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qijing Machinery position performs unexpectedly, Zhejiang Juhua 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 Juhua will offset losses from the drop in Zhejiang Juhua's long position.Qijing Machinery vs. Industrial and Commercial | Qijing Machinery vs. China Construction Bank | Qijing Machinery vs. Agricultural Bank of | Qijing Machinery vs. Bank of China |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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