Correlation Between Kangxin New and Zhejiang Dahua
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By analyzing existing cross correlation between Kangxin New Materials and Zhejiang Dahua Technology, you can compare the effects of market volatilities on Kangxin New and Zhejiang Dahua 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 Kangxin New with a short position of Zhejiang Dahua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kangxin New and Zhejiang Dahua.
Diversification Opportunities for Kangxin New and Zhejiang Dahua
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kangxin and Zhejiang is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Kangxin New Materials and Zhejiang Dahua Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Dahua Technology and Kangxin New 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 Kangxin New Materials are associated (or correlated) with Zhejiang Dahua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Dahua Technology has no effect on the direction of Kangxin New i.e., Kangxin New and Zhejiang Dahua go up and down completely randomly.
Pair Corralation between Kangxin New and Zhejiang Dahua
Assuming the 90 days trading horizon Kangxin New Materials is expected to generate 1.71 times more return on investment than Zhejiang Dahua. However, Kangxin New is 1.71 times more volatile than Zhejiang Dahua Technology. It trades about 0.04 of its potential returns per unit of risk. Zhejiang Dahua Technology is currently generating about -0.07 per unit of risk. If you would invest 186.00 in Kangxin New Materials on October 22, 2024 and sell it today you would earn a total of 10.00 from holding Kangxin New Materials or generate 5.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Kangxin New Materials vs. Zhejiang Dahua Technology
Performance |
Timeline |
Kangxin New Materials |
Zhejiang Dahua Technology |
Kangxin New and Zhejiang Dahua Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kangxin New and Zhejiang Dahua
The main advantage of trading using opposite Kangxin New and Zhejiang Dahua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kangxin New position performs unexpectedly, Zhejiang Dahua 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 Dahua will offset losses from the drop in Zhejiang Dahua's long position.Kangxin New vs. UE Furniture Co | Kangxin New vs. Qumei Furniture Group | Kangxin New vs. Rising Nonferrous Metals | Kangxin New vs. Luolai Home Textile |
Zhejiang Dahua vs. Holitech Technology Co | Zhejiang Dahua vs. Air China Ltd | Zhejiang Dahua vs. Keda Clean Energy | Zhejiang Dahua vs. Kuang Chi Technologies |
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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