Correlation Between Zhejiang Juhua and Xinjiang Zhongtai
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By analyzing existing cross correlation between Zhejiang Juhua Co and Xinjiang Zhongtai Chemical, you can compare the effects of market volatilities on Zhejiang Juhua and Xinjiang Zhongtai 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 Xinjiang Zhongtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Juhua and Xinjiang Zhongtai.
Diversification Opportunities for Zhejiang Juhua and Xinjiang Zhongtai
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Xinjiang is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Juhua Co and Xinjiang Zhongtai Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Zhongtai 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 Xinjiang Zhongtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Zhongtai has no effect on the direction of Zhejiang Juhua i.e., Zhejiang Juhua and Xinjiang Zhongtai go up and down completely randomly.
Pair Corralation between Zhejiang Juhua and Xinjiang Zhongtai
Assuming the 90 days trading horizon Zhejiang Juhua Co is expected to generate 1.42 times more return on investment than Xinjiang Zhongtai. However, Zhejiang Juhua is 1.42 times more volatile than Xinjiang Zhongtai Chemical. It trades about 0.23 of its potential returns per unit of risk. Xinjiang Zhongtai Chemical is currently generating about 0.26 per unit of risk. If you would invest 1,572 in Zhejiang Juhua Co on September 12, 2024 and sell it today you would earn a total of 709.00 from holding Zhejiang Juhua Co or generate 45.1% 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. Xinjiang Zhongtai Chemical
Performance |
Timeline |
Zhejiang Juhua |
Xinjiang Zhongtai |
Zhejiang Juhua and Xinjiang Zhongtai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zhejiang Juhua and Xinjiang Zhongtai
The main advantage of trading using opposite Zhejiang Juhua and Xinjiang Zhongtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Juhua position performs unexpectedly, Xinjiang Zhongtai 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 Xinjiang Zhongtai will offset losses from the drop in Xinjiang Zhongtai's long position.Zhejiang Juhua vs. Western Mining Co | Zhejiang Juhua vs. New Hope Dairy | Zhejiang Juhua vs. Jiangxi Naipu Mining | Zhejiang Juhua vs. Shandong Mining Machinery |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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