Correlation Between Varta AG and Zhongsheng Group
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By analyzing existing cross correlation between Varta AG and Zhongsheng Group Holdings, you can compare the effects of market volatilities on Varta AG and Zhongsheng Group 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 Varta AG with a short position of Zhongsheng Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Varta AG and Zhongsheng Group.
Diversification Opportunities for Varta AG and Zhongsheng Group
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Varta and Zhongsheng is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Varta AG and Zhongsheng Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongsheng Group Holdings and Varta AG 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 Varta AG are associated (or correlated) with Zhongsheng Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongsheng Group Holdings has no effect on the direction of Varta AG i.e., Varta AG and Zhongsheng Group go up and down completely randomly.
Pair Corralation between Varta AG and Zhongsheng Group
Assuming the 90 days trading horizon Varta AG is expected to generate 2.13 times more return on investment than Zhongsheng Group. However, Varta AG is 2.13 times more volatile than Zhongsheng Group Holdings. It trades about 0.07 of its potential returns per unit of risk. Zhongsheng Group Holdings is currently generating about 0.14 per unit of risk. If you would invest 146.00 in Varta AG on September 24, 2024 and sell it today you would earn a total of 16.00 from holding Varta AG or generate 10.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Varta AG vs. Zhongsheng Group Holdings
Performance |
Timeline |
Varta AG |
Zhongsheng Group Holdings |
Varta AG and Zhongsheng Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Varta AG and Zhongsheng Group
The main advantage of trading using opposite Varta AG and Zhongsheng Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Varta AG position performs unexpectedly, Zhongsheng Group 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 Zhongsheng Group will offset losses from the drop in Zhongsheng Group's long position.Varta AG vs. METTLER TOLEDO INTL | Varta AG vs. METTLER TOLEDO INTL | Varta AG vs. Mitie Group PLC | Varta AG vs. LODESTAR MIN |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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