Correlation Between Zhejiang Crystal and State Grid

Can any of the company-specific risk be diversified away by investing in both Zhejiang Crystal and State Grid 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 Zhejiang Crystal and State Grid into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Zhejiang Crystal Optech and State Grid InformationCommunication, you can compare the effects of market volatilities on Zhejiang Crystal and State Grid 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 Crystal with a short position of State Grid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Crystal and State Grid.

Diversification Opportunities for Zhejiang Crystal and State Grid

0.0

Correlation Coefficient

Zhejiang Crystal  State Grid

Pay attention - limited upside

The 3 months correlation between Zhejiang and State is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Crystal Optech and State Grid InformationCommunic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Grid Informati and Zhejiang Crystal 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 Crystal Optech are associated (or correlated) with State Grid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Grid Informati has no effect on the direction of Zhejiang Crystal i.e., Zhejiang Crystal and State Grid go up and down completely randomly.

Pair Corralation between Zhejiang Crystal and State Grid

If you would invest  1,554  in State Grid InformationCommunication on October 4, 2024 and sell it today you would earn a total of  337.00  from holding State Grid InformationCommunication or generate 21.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.83%
Values	Daily Returns

Zhejiang Crystal Optech  vs.  State Grid InformationCommunic

Zhejiang Crystal Optech

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Zhejiang Crystal Optech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Zhejiang Crystal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

State Grid Informati

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days State Grid InformationCommunication has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, State Grid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Zhejiang Crystal and State Grid

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

The idea behind Zhejiang Crystal Optech and State Grid InformationCommunication 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.