Correlation Between Zhejiang Construction and Xinhua Winshare
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By analyzing existing cross correlation between Zhejiang Construction Investment and Xinhua Winshare Publishing, you can compare the effects of market volatilities on Zhejiang Construction and Xinhua Winshare 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 Xinhua Winshare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Construction and Xinhua Winshare.
Diversification Opportunities for Zhejiang Construction and Xinhua Winshare
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Zhejiang and Xinhua is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Construction Investme and Xinhua Winshare Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinhua Winshare Publ 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 Xinhua Winshare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinhua Winshare Publ has no effect on the direction of Zhejiang Construction i.e., Zhejiang Construction and Xinhua Winshare go up and down completely randomly.
Pair Corralation between Zhejiang Construction and Xinhua Winshare
Assuming the 90 days trading horizon Zhejiang Construction Investment is expected to under-perform the Xinhua Winshare. In addition to that, Zhejiang Construction is 1.14 times more volatile than Xinhua Winshare Publishing. It trades about -0.04 of its total potential returns per unit of risk. Xinhua Winshare Publishing is currently generating about 0.05 per unit of volatility. If you would invest 984.00 in Xinhua Winshare Publishing on September 24, 2024 and sell it today you would earn a total of 569.00 from holding Xinhua Winshare Publishing or generate 57.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 99.58% |
Values | Daily Returns |
Zhejiang Construction Investme vs. Xinhua Winshare Publishing
Performance |
Timeline |
Zhejiang Construction |
Xinhua Winshare Publ |
Zhejiang Construction and Xinhua Winshare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zhejiang Construction and Xinhua Winshare
The main advantage of trading using opposite Zhejiang Construction and Xinhua Winshare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Construction position performs unexpectedly, Xinhua Winshare 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 Xinhua Winshare will offset losses from the drop in Xinhua Winshare's long position.The idea behind Zhejiang Construction Investment and Xinhua Winshare Publishing 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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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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