Correlation Between ZYF Lopsking and China Singapore

Can any of the company-specific risk be diversified away by investing in both ZYF Lopsking and China Singapore 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 ZYF Lopsking and China Singapore into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ZYF Lopsking Aluminum and China Singapore Suzhou Industrial, you can compare the effects of market volatilities on ZYF Lopsking and China Singapore 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 ZYF Lopsking with a short position of China Singapore. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZYF Lopsking and China Singapore.

Diversification Opportunities for ZYF Lopsking and China Singapore

0.62

Correlation Coefficient

ZYF Lopsking  China Singapore

Poor diversification

The 3 months correlation between ZYF and China is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding ZYF Lopsking Aluminum and China Singapore Suzhou Industr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Singapore Suzhou and ZYF Lopsking 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 ZYF Lopsking Aluminum are associated (or correlated) with China Singapore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Singapore Suzhou has no effect on the direction of ZYF Lopsking i.e., ZYF Lopsking and China Singapore go up and down completely randomly.

Pair Corralation between ZYF Lopsking and China Singapore

Assuming the 90 days trading horizon ZYF Lopsking Aluminum is expected to generate 1.33 times more return on investment than China Singapore. However, ZYF Lopsking is 1.33 times more volatile than China Singapore Suzhou Industrial. It trades about 0.06 of its potential returns per unit of risk. China Singapore Suzhou Industrial is currently generating about 0.02 per unit of risk. If you would invest  530.00  in ZYF Lopsking Aluminum on December 23, 2024 and sell it today you would earn a total of  34.00  from holding ZYF Lopsking Aluminum or generate 6.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

ZYF Lopsking Aluminum  vs.  China Singapore Suzhou Industr

ZYF Lopsking Aluminum

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ZYF Lopsking Aluminum are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ZYF Lopsking may actually be approaching a critical reversion point that can send shares even higher in April 2025.

China Singapore Suzhou

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in China Singapore Suzhou Industrial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, China Singapore is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ZYF Lopsking and China Singapore

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

The idea behind ZYF Lopsking Aluminum and China Singapore Suzhou Industrial 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.