Correlation Between Xiamen Jihong and Zhejiang Longsheng
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By analyzing existing cross correlation between Xiamen Jihong Package and Zhejiang Longsheng Group, you can compare the effects of market volatilities on Xiamen Jihong and Zhejiang Longsheng 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 Xiamen Jihong with a short position of Zhejiang Longsheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen Jihong and Zhejiang Longsheng.
Diversification Opportunities for Xiamen Jihong and Zhejiang Longsheng
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xiamen and Zhejiang is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen Jihong Package and Zhejiang Longsheng Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Longsheng and Xiamen Jihong 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 Xiamen Jihong Package are associated (or correlated) with Zhejiang Longsheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Longsheng has no effect on the direction of Xiamen Jihong i.e., Xiamen Jihong and Zhejiang Longsheng go up and down completely randomly.
Pair Corralation between Xiamen Jihong and Zhejiang Longsheng
Assuming the 90 days trading horizon Xiamen Jihong Package is expected to generate 2.75 times more return on investment than Zhejiang Longsheng. However, Xiamen Jihong is 2.75 times more volatile than Zhejiang Longsheng Group. It trades about 0.04 of its potential returns per unit of risk. Zhejiang Longsheng Group is currently generating about -0.02 per unit of risk. If you would invest 1,217 in Xiamen Jihong Package on October 21, 2024 and sell it today you would earn a total of 58.00 from holding Xiamen Jihong Package or generate 4.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Xiamen Jihong Package vs. Zhejiang Longsheng Group
Performance |
Timeline |
Xiamen Jihong Package |
Zhejiang Longsheng |
Xiamen Jihong and Zhejiang Longsheng Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xiamen Jihong and Zhejiang Longsheng
The main advantage of trading using opposite Xiamen Jihong and Zhejiang Longsheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen Jihong position performs unexpectedly, Zhejiang Longsheng 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 Zhejiang Longsheng will offset losses from the drop in Zhejiang Longsheng's long position.Xiamen Jihong vs. Changchun Engley Automobile | ||
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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