Correlation Between Zhejiang Juhua and Qinghai Salt
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By analyzing existing cross correlation between Zhejiang Juhua Co and Qinghai Salt Lake, you can compare the effects of market volatilities on Zhejiang Juhua and Qinghai Salt 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 Juhua with a short position of Qinghai Salt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Juhua and Qinghai Salt.
Diversification Opportunities for Zhejiang Juhua and Qinghai Salt
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Qinghai is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Juhua Co and Qinghai Salt Lake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qinghai Salt Lake and Zhejiang Juhua 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 Juhua Co are associated (or correlated) with Qinghai Salt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qinghai Salt Lake has no effect on the direction of Zhejiang Juhua i.e., Zhejiang Juhua and Qinghai Salt go up and down completely randomly.
Pair Corralation between Zhejiang Juhua and Qinghai Salt
Assuming the 90 days trading horizon Zhejiang Juhua Co is expected to generate 1.13 times more return on investment than Qinghai Salt. However, Zhejiang Juhua is 1.13 times more volatile than Qinghai Salt Lake. It trades about 0.17 of its potential returns per unit of risk. Qinghai Salt Lake is currently generating about 0.07 per unit of risk. If you would invest 1,740 in Zhejiang Juhua Co on September 24, 2024 and sell it today you would earn a total of 551.00 from holding Zhejiang Juhua Co or generate 31.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Zhejiang Juhua Co vs. Qinghai Salt Lake
Performance |
Timeline |
Zhejiang Juhua |
Qinghai Salt Lake |
Zhejiang Juhua and Qinghai Salt Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zhejiang Juhua and Qinghai Salt
The main advantage of trading using opposite Zhejiang Juhua and Qinghai Salt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Juhua position performs unexpectedly, Qinghai Salt 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 Qinghai Salt will offset losses from the drop in Qinghai Salt's long position.Zhejiang Juhua vs. Zijin Mining Group | Zhejiang Juhua vs. Wanhua Chemical Group | Zhejiang Juhua vs. Baoshan Iron Steel | Zhejiang Juhua vs. Shandong Gold Mining |
Qinghai Salt vs. Zijin Mining Group | Qinghai Salt vs. Wanhua Chemical Group | Qinghai Salt vs. Baoshan Iron Steel | Qinghai Salt vs. Shandong Gold Mining |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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