Correlation Between ZTE Corp and Bomesc Offshore
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By analyzing existing cross correlation between ZTE Corp and Bomesc Offshore Engineering, you can compare the effects of market volatilities on ZTE Corp and Bomesc Offshore 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 ZTE Corp with a short position of Bomesc Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZTE Corp and Bomesc Offshore.
Diversification Opportunities for ZTE Corp and Bomesc Offshore
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ZTE and Bomesc is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding ZTE Corp and Bomesc Offshore Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bomesc Offshore Engi and ZTE Corp 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 ZTE Corp are associated (or correlated) with Bomesc Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bomesc Offshore Engi has no effect on the direction of ZTE Corp i.e., ZTE Corp and Bomesc Offshore go up and down completely randomly.
Pair Corralation between ZTE Corp and Bomesc Offshore
Assuming the 90 days trading horizon ZTE Corp is expected to generate 1.92 times more return on investment than Bomesc Offshore. However, ZTE Corp is 1.92 times more volatile than Bomesc Offshore Engineering. It trades about 0.29 of its potential returns per unit of risk. Bomesc Offshore Engineering is currently generating about -0.04 per unit of risk. If you would invest 3,063 in ZTE Corp on September 24, 2024 and sell it today you would earn a total of 552.00 from holding ZTE Corp or generate 18.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
ZTE Corp vs. Bomesc Offshore Engineering
Performance |
Timeline |
ZTE Corp |
Bomesc Offshore Engi |
ZTE Corp and Bomesc Offshore Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ZTE Corp and Bomesc Offshore
The main advantage of trading using opposite ZTE Corp and Bomesc Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZTE Corp position performs unexpectedly, Bomesc Offshore 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 Bomesc Offshore will offset losses from the drop in Bomesc Offshore's long position.ZTE Corp vs. Industrial and Commercial | ZTE Corp vs. Agricultural Bank of | ZTE Corp vs. China Construction Bank | ZTE Corp 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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