Correlation Between Elite Color and Zhejiang Crystal

Can any of the company-specific risk be diversified away by investing in both Elite Color and Zhejiang Crystal 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 Elite Color and Zhejiang Crystal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Elite Color Environmental and Zhejiang Crystal Optech, you can compare the effects of market volatilities on Elite Color and Zhejiang Crystal 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 Elite Color with a short position of Zhejiang Crystal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elite Color and Zhejiang Crystal.

Diversification Opportunities for Elite Color and Zhejiang Crystal

0.0

Correlation Coefficient

Elite Color  Zhejiang Crystal

Pay attention - limited upside

The 3 months correlation between Elite and Zhejiang is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Elite Color Environmental and Zhejiang Crystal Optech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Crystal Optech and Elite Color 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 Elite Color Environmental are associated (or correlated) with Zhejiang Crystal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Crystal Optech has no effect on the direction of Elite Color i.e., Elite Color and Zhejiang Crystal go up and down completely randomly.

Pair Corralation between Elite Color and Zhejiang Crystal

If you would invest  568.00  in Elite Color Environmental on October 22, 2024 and sell it today you would earn a total of  49.00  from holding Elite Color Environmental or generate 8.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Elite Color Environmental  vs.  Zhejiang Crystal Optech

Elite Color Environmental

Risk-Adjusted Performance

4 of 100

Modest

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

Zhejiang Crystal Optech

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Zhejiang Crystal Optech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Zhejiang Crystal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Elite Color and Zhejiang Crystal

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

The idea behind Elite Color Environmental and Zhejiang Crystal Optech 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.