Correlation Between Zhejiang Juhua and Wankai New
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By analyzing existing cross correlation between Zhejiang Juhua Co and Wankai New Materials, you can compare the effects of market volatilities on Zhejiang Juhua and Wankai New 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 Wankai New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Juhua and Wankai New.
Diversification Opportunities for Zhejiang Juhua and Wankai New
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Wankai is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Juhua Co and Wankai New Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wankai New Materials 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 Wankai New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wankai New Materials has no effect on the direction of Zhejiang Juhua i.e., Zhejiang Juhua and Wankai New go up and down completely randomly.
Pair Corralation between Zhejiang Juhua and Wankai New
Assuming the 90 days trading horizon Zhejiang Juhua Co is expected to generate 1.28 times more return on investment than Wankai New. However, Zhejiang Juhua is 1.28 times more volatile than Wankai New Materials. It trades about 0.1 of its potential returns per unit of risk. Wankai New Materials is currently generating about -0.06 per unit of risk. If you would invest 2,100 in Zhejiang Juhua Co on September 23, 2024 and sell it today you would earn a total of 191.00 from holding Zhejiang Juhua Co or generate 9.1% 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. Wankai New Materials
Performance |
Timeline |
Zhejiang Juhua |
Wankai New Materials |
Zhejiang Juhua and Wankai New Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zhejiang Juhua and Wankai New
The main advantage of trading using opposite Zhejiang Juhua and Wankai New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Juhua position performs unexpectedly, Wankai New 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 Wankai New will offset losses from the drop in Wankai New's long position.Zhejiang Juhua vs. Allied Machinery Co | Zhejiang Juhua vs. Masterwork Machinery | Zhejiang Juhua vs. Qijing Machinery | Zhejiang Juhua vs. Lutian Machinery Co |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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