Correlation Between Zhejiang JIULI and Guangdong Shenglu
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By analyzing existing cross correlation between Zhejiang JIULI Hi tech and Guangdong Shenglu Telecommunication, you can compare the effects of market volatilities on Zhejiang JIULI and Guangdong Shenglu 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 JIULI with a short position of Guangdong Shenglu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang JIULI and Guangdong Shenglu.
Diversification Opportunities for Zhejiang JIULI and Guangdong Shenglu
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Guangdong is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang JIULI Hi tech and Guangdong Shenglu Telecommunic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Shenglu and Zhejiang JIULI 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 JIULI Hi tech are associated (or correlated) with Guangdong Shenglu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Shenglu has no effect on the direction of Zhejiang JIULI i.e., Zhejiang JIULI and Guangdong Shenglu go up and down completely randomly.
Pair Corralation between Zhejiang JIULI and Guangdong Shenglu
Assuming the 90 days trading horizon Zhejiang JIULI Hi tech is expected to generate 0.7 times more return on investment than Guangdong Shenglu. However, Zhejiang JIULI Hi tech is 1.43 times less risky than Guangdong Shenglu. It trades about 0.02 of its potential returns per unit of risk. Guangdong Shenglu Telecommunication is currently generating about -0.02 per unit of risk. If you would invest 2,360 in Zhejiang JIULI Hi tech on September 25, 2024 and sell it today you would earn a total of 11.00 from holding Zhejiang JIULI Hi tech or generate 0.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Zhejiang JIULI Hi tech vs. Guangdong Shenglu Telecommunic
Performance |
Timeline |
Zhejiang JIULI Hi |
Guangdong Shenglu |
Zhejiang JIULI and Guangdong Shenglu Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zhejiang JIULI and Guangdong Shenglu
The main advantage of trading using opposite Zhejiang JIULI and Guangdong Shenglu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang JIULI position performs unexpectedly, Guangdong Shenglu 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 Guangdong Shenglu will offset losses from the drop in Guangdong Shenglu's long position.Zhejiang JIULI vs. Wanhua Chemical Group | Zhejiang JIULI vs. Shandong Gold Mining | Zhejiang JIULI vs. Rongsheng Petrochemical Co | Zhejiang JIULI vs. Inner Mongolia BaoTou |
Guangdong Shenglu vs. Industrial and Commercial | Guangdong Shenglu vs. Agricultural Bank of | Guangdong Shenglu vs. China Construction Bank | Guangdong Shenglu vs. Bank of China |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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