Correlation Between Zhejiang Construction and Hunan TV
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By analyzing existing cross correlation between Zhejiang Construction Investment and Hunan TV Broadcast, you can compare the effects of market volatilities on Zhejiang Construction and Hunan TV 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 Construction with a short position of Hunan TV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Construction and Hunan TV.
Diversification Opportunities for Zhejiang Construction and Hunan TV
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and Hunan is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Construction Investme and Hunan TV Broadcast in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan TV Broadcast and Zhejiang Construction 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 Construction Investment are associated (or correlated) with Hunan TV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan TV Broadcast has no effect on the direction of Zhejiang Construction i.e., Zhejiang Construction and Hunan TV go up and down completely randomly.
Pair Corralation between Zhejiang Construction and Hunan TV
Assuming the 90 days trading horizon Zhejiang Construction is expected to generate 1.5 times less return on investment than Hunan TV. But when comparing it to its historical volatility, Zhejiang Construction Investment is 1.21 times less risky than Hunan TV. It trades about 0.19 of its potential returns per unit of risk. Hunan TV Broadcast is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 474.00 in Hunan TV Broadcast on September 13, 2024 and sell it today you would earn a total of 387.00 from holding Hunan TV Broadcast or generate 81.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.25% |
Values | Daily Returns |
Zhejiang Construction Investme vs. Hunan TV Broadcast
Performance |
Timeline |
Zhejiang Construction |
Hunan TV Broadcast |
Zhejiang Construction and Hunan TV Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zhejiang Construction and Hunan TV
The main advantage of trading using opposite Zhejiang Construction and Hunan TV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Construction position performs unexpectedly, Hunan TV 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 Hunan TV will offset losses from the drop in Hunan TV's long position.Zhejiang Construction vs. Lutian Machinery Co | Zhejiang Construction vs. China Longyuan Power | Zhejiang Construction vs. PetroChina Co Ltd | Zhejiang Construction vs. Bank of China |
Hunan TV vs. BYD Co Ltd | Hunan TV vs. China Mobile Limited | Hunan TV vs. Agricultural Bank of | Hunan TV vs. Industrial and Commercial |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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