Correlation Between Digital China and Zhende Medical
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By analyzing existing cross correlation between Digital China Information and Zhende Medical Co, you can compare the effects of market volatilities on Digital China and Zhende Medical 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 Digital China with a short position of Zhende Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital China and Zhende Medical.
Diversification Opportunities for Digital China and Zhende Medical
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Digital and Zhende is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Digital China Information and Zhende Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhende Medical and Digital China 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 Digital China Information are associated (or correlated) with Zhende Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhende Medical has no effect on the direction of Digital China i.e., Digital China and Zhende Medical go up and down completely randomly.
Pair Corralation between Digital China and Zhende Medical
Assuming the 90 days trading horizon Digital China Information is expected to generate 1.52 times more return on investment than Zhende Medical. However, Digital China is 1.52 times more volatile than Zhende Medical Co. It trades about 0.03 of its potential returns per unit of risk. Zhende Medical Co is currently generating about -0.05 per unit of risk. If you would invest 1,118 in Digital China Information on September 24, 2024 and sell it today you would earn a total of 200.00 from holding Digital China Information or generate 17.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Digital China Information vs. Zhende Medical Co
Performance |
Timeline |
Digital China Information |
Zhende Medical |
Digital China and Zhende Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Digital China and Zhende Medical
The main advantage of trading using opposite Digital China and Zhende Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital China position performs unexpectedly, Zhende Medical 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 Zhende Medical will offset losses from the drop in Zhende Medical's long position.Digital China vs. Anhui Jianghuai Automobile | Digital China vs. Qumei Furniture Group | Digital China vs. Chongqing Changan Automobile | Digital China vs. AUPU Home Style |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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