Correlation Between Zhejiang Orient and XCMG Construction
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By analyzing existing cross correlation between Zhejiang Orient Gene and XCMG Construction Machinery, you can compare the effects of market volatilities on Zhejiang Orient and XCMG 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 Zhejiang Orient with a short position of XCMG Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Orient and XCMG Construction.
Diversification Opportunities for Zhejiang Orient and XCMG Construction
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and XCMG is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Orient Gene and XCMG Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XCMG Construction and Zhejiang Orient 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 Orient Gene are associated (or correlated) with XCMG Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XCMG Construction has no effect on the direction of Zhejiang Orient i.e., Zhejiang Orient and XCMG Construction go up and down completely randomly.
Pair Corralation between Zhejiang Orient and XCMG Construction
Assuming the 90 days trading horizon Zhejiang Orient Gene is expected to generate 1.67 times more return on investment than XCMG Construction. However, Zhejiang Orient is 1.67 times more volatile than XCMG Construction Machinery. It trades about 0.06 of its potential returns per unit of risk. XCMG Construction Machinery is currently generating about 0.09 per unit of risk. If you would invest 2,617 in Zhejiang Orient Gene on September 23, 2024 and sell it today you would earn a total of 295.00 from holding Zhejiang Orient Gene or generate 11.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Zhejiang Orient Gene vs. XCMG Construction Machinery
Performance |
Timeline |
Zhejiang Orient Gene |
XCMG Construction |
Zhejiang Orient and XCMG Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zhejiang Orient and XCMG Construction
The main advantage of trading using opposite Zhejiang Orient and XCMG Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Orient position performs unexpectedly, XCMG 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 XCMG Construction will offset losses from the drop in XCMG Construction's long position.Zhejiang Orient vs. New China Life | Zhejiang Orient vs. Ming Yang Smart | Zhejiang Orient vs. 159681 | Zhejiang Orient vs. 159005 |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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