Correlation Between Zhonghong Pulin and Duzhe Publishing

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Can any of the company-specific risk be diversified away by investing in both Zhonghong Pulin and Duzhe Publishing 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 Zhonghong Pulin and Duzhe Publishing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zhonghong Pulin Medical and Duzhe Publishing Media, you can compare the effects of market volatilities on Zhonghong Pulin and Duzhe Publishing 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 Zhonghong Pulin with a short position of Duzhe Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhonghong Pulin and Duzhe Publishing.

Diversification Opportunities for Zhonghong Pulin and Duzhe Publishing

0.59
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Zhonghong and Duzhe is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Zhonghong Pulin Medical and Duzhe Publishing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duzhe Publishing Media and Zhonghong Pulin 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 Zhonghong Pulin Medical are associated (or correlated) with Duzhe Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duzhe Publishing Media has no effect on the direction of Zhonghong Pulin i.e., Zhonghong Pulin and Duzhe Publishing go up and down completely randomly.

Pair Corralation between Zhonghong Pulin and Duzhe Publishing

Assuming the 90 days trading horizon Zhonghong Pulin is expected to generate 3.8 times less return on investment than Duzhe Publishing. In addition to that, Zhonghong Pulin is 1.12 times more volatile than Duzhe Publishing Media. It trades about 0.01 of its total potential returns per unit of risk. Duzhe Publishing Media is currently generating about 0.03 per unit of volatility. If you would invest  550.00  in Duzhe Publishing Media on October 9, 2024 and sell it today you would earn a total of  16.00  from holding Duzhe Publishing Media or generate 2.91% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Zhonghong Pulin Medical  vs.  Duzhe Publishing Media

 Performance 
       Timeline  
Zhonghong Pulin Medical 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Zhonghong Pulin Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Zhonghong Pulin is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Duzhe Publishing Media 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Duzhe Publishing Media are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Duzhe Publishing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Zhonghong Pulin and Duzhe Publishing Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Zhonghong Pulin and Duzhe Publishing

The main advantage of trading using opposite Zhonghong Pulin and Duzhe Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhonghong Pulin position performs unexpectedly, Duzhe Publishing 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 Duzhe Publishing will offset losses from the drop in Duzhe Publishing's long position.
The idea behind Zhonghong Pulin Medical and Duzhe Publishing Media 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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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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