Correlation Between Zhejiang Yayi and Shijiazhuang Tonhe
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By analyzing existing cross correlation between Zhejiang Yayi Metal and Shijiazhuang Tonhe Electronics, you can compare the effects of market volatilities on Zhejiang Yayi and Shijiazhuang Tonhe 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 Yayi with a short position of Shijiazhuang Tonhe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Yayi and Shijiazhuang Tonhe.
Diversification Opportunities for Zhejiang Yayi and Shijiazhuang Tonhe
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Zhejiang and Shijiazhuang is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Yayi Metal and Shijiazhuang Tonhe Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shijiazhuang Tonhe and Zhejiang Yayi 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 Yayi Metal are associated (or correlated) with Shijiazhuang Tonhe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shijiazhuang Tonhe has no effect on the direction of Zhejiang Yayi i.e., Zhejiang Yayi and Shijiazhuang Tonhe go up and down completely randomly.
Pair Corralation between Zhejiang Yayi and Shijiazhuang Tonhe
Assuming the 90 days trading horizon Zhejiang Yayi is expected to generate 1.0 times less return on investment than Shijiazhuang Tonhe. But when comparing it to its historical volatility, Zhejiang Yayi Metal is 1.1 times less risky than Shijiazhuang Tonhe. It trades about 0.07 of its potential returns per unit of risk. Shijiazhuang Tonhe Electronics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,393 in Shijiazhuang Tonhe Electronics on September 25, 2024 and sell it today you would earn a total of 324.00 from holding Shijiazhuang Tonhe Electronics or generate 23.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Zhejiang Yayi Metal vs. Shijiazhuang Tonhe Electronics
Performance |
Timeline |
Zhejiang Yayi Metal |
Shijiazhuang Tonhe |
Zhejiang Yayi and Shijiazhuang Tonhe Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zhejiang Yayi and Shijiazhuang Tonhe
The main advantage of trading using opposite Zhejiang Yayi and Shijiazhuang Tonhe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Yayi position performs unexpectedly, Shijiazhuang Tonhe 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 Shijiazhuang Tonhe will offset losses from the drop in Shijiazhuang Tonhe's long position.Zhejiang Yayi vs. Agricultural Bank of | Zhejiang Yayi vs. Industrial and Commercial | Zhejiang Yayi vs. Bank of China | Zhejiang Yayi vs. China Construction Bank |
Shijiazhuang Tonhe vs. Heilongjiang Transport Development | Shijiazhuang Tonhe vs. Aluminum Corp of | Shijiazhuang Tonhe vs. Lander Sports Development | Shijiazhuang Tonhe vs. Zhejiang Yayi Metal |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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