Correlation Between Shenyang Huitian and Zhejiang Publishing

Can any of the company-specific risk be diversified away by investing in both Shenyang Huitian and Zhejiang Publishing at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Shenyang Huitian and Zhejiang Publishing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shenyang Huitian Thermal and Zhejiang Publishing Media, you can compare the effects of market volatilities on Shenyang Huitian and Zhejiang Publishing 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 Shenyang Huitian with a short position of Zhejiang Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Huitian and Zhejiang Publishing.

Diversification Opportunities for Shenyang Huitian and Zhejiang Publishing

-0.04

Correlation Coefficient

Shenyang Huitian  Zhejiang Publishing

Good diversification

The 3 months correlation between Shenyang and Zhejiang is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Huitian Thermal and Zhejiang Publishing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Publishing Media and Shenyang Huitian 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 Shenyang Huitian Thermal are associated (or correlated) with Zhejiang Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Publishing Media has no effect on the direction of Shenyang Huitian i.e., Shenyang Huitian and Zhejiang Publishing go up and down completely randomly.

Pair Corralation between Shenyang Huitian and Zhejiang Publishing

Assuming the 90 days trading horizon Shenyang Huitian is expected to generate 1.19 times less return on investment than Zhejiang Publishing. In addition to that, Shenyang Huitian is 1.05 times more volatile than Zhejiang Publishing Media. It trades about 0.02 of its total potential returns per unit of risk. Zhejiang Publishing Media is currently generating about 0.02 per unit of volatility. If you would invest  708.00  in Zhejiang Publishing Media on October 5, 2024 and sell it today you would earn a total of  75.00  from holding Zhejiang Publishing Media or generate 10.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.78%
Values	Daily Returns

Shenyang Huitian Thermal  vs.  Zhejiang Publishing Media

Shenyang Huitian Thermal

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shenyang Huitian Thermal are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shenyang Huitian may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Zhejiang Publishing Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zhejiang Publishing Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Shenyang Huitian and Zhejiang Publishing

The main advantage of trading using opposite Shenyang Huitian and Zhejiang Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Huitian position performs unexpectedly, Zhejiang Publishing 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 Publishing will offset losses from the drop in Zhejiang Publishing's long position.

The idea behind Shenyang Huitian Thermal and Zhejiang Publishing Media pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.