Correlation Between Ziel Home and Changchun Engley

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

Diversification Opportunities for Ziel Home and Changchun Engley

ZielChangchunDiversified AwayZielChangchunDiversified Away100%
0.61
  Correlation Coefficient

Poor diversification

The 3 months correlation between Ziel and Changchun is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ziel Home Furnishing and Changchun Engley Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun Engley Aut and Ziel Home 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 Ziel Home Furnishing are associated (or correlated) with Changchun Engley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun Engley Aut has no effect on the direction of Ziel Home i.e., Ziel Home and Changchun Engley go up and down completely randomly.

Pair Corralation between Ziel Home and Changchun Engley

Assuming the 90 days trading horizon Ziel Home Furnishing is not expected to generate positive returns. Moreover, Ziel Home is 1.25 times more volatile than Changchun Engley Automobile. It trades away all of its potential returns to assume current level of volatility. Changchun Engley Automobile is currently generating about -0.02 per unit of risk. If you would invest  2,466  in Ziel Home Furnishing on October 31, 2024 and sell it today you would lose (495.00) from holding Ziel Home Furnishing or give up 20.07% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy81.7%
ValuesDaily Returns

Ziel Home Furnishing  vs.  Changchun Engley Automobile

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -15-10-50510
JavaScript chart by amCharts 3.21.15301376 601279
       Timeline  
Ziel Home Furnishing 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Ziel Home Furnishing are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ziel Home may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanJan181920212223
Changchun Engley Aut 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Changchun Engley Automobile has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15DecJanJan3.43.63.844.24.44.6

Ziel Home and Changchun Engley Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-8.29-6.21-4.13-2.050.02.024.116.28.2910.38 0.020.030.040.050.060.07
JavaScript chart by amCharts 3.21.15301376 601279
       Returns  

Pair Trading with Ziel Home and Changchun Engley

The main advantage of trading using opposite Ziel Home and Changchun Engley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ziel Home position performs unexpectedly, Changchun Engley 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 Changchun Engley will offset losses from the drop in Changchun Engley's long position.
The idea behind Ziel Home Furnishing and Changchun Engley Automobile 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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