Correlation Between Panda Financial and Zhejiang JIULI

Can any of the company-specific risk be diversified away by investing in both Panda Financial and Zhejiang JIULI 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 Panda Financial and Zhejiang JIULI into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Panda Financial Holding and Zhejiang JIULI Hi tech, you can compare the effects of market volatilities on Panda Financial and Zhejiang JIULI 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 Panda Financial with a short position of Zhejiang JIULI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panda Financial and Zhejiang JIULI.

Diversification Opportunities for Panda Financial and Zhejiang JIULI

0.29

Correlation Coefficient

Panda Financial  Zhejiang JIULI

Modest diversification

The 3 months correlation between Panda and Zhejiang is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Panda Financial Holding and Zhejiang JIULI Hi tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang JIULI Hi and Panda Financial 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 Panda Financial Holding are associated (or correlated) with Zhejiang JIULI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang JIULI Hi has no effect on the direction of Panda Financial i.e., Panda Financial and Zhejiang JIULI go up and down completely randomly.

Pair Corralation between Panda Financial and Zhejiang JIULI

Assuming the 90 days trading horizon Panda Financial Holding is expected to under-perform the Zhejiang JIULI. In addition to that, Panda Financial is 2.34 times more volatile than Zhejiang JIULI Hi tech. It trades about -0.2 of its total potential returns per unit of risk. Zhejiang JIULI Hi tech is currently generating about -0.11 per unit of volatility. If you would invest  2,456  in Zhejiang JIULI Hi tech on December 1, 2024 and sell it today you would lose (206.00) from holding Zhejiang JIULI Hi tech or give up 8.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Panda Financial Holding  vs.  Zhejiang JIULI Hi tech

Panda Financial Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Panda Financial Holding 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Zhejiang JIULI Hi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zhejiang JIULI Hi tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Panda Financial and Zhejiang JIULI

The main advantage of trading using opposite Panda Financial and Zhejiang JIULI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panda Financial position performs unexpectedly, Zhejiang JIULI 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 JIULI will offset losses from the drop in Zhejiang JIULI's long position.

The idea behind Panda Financial Holding and Zhejiang JIULI Hi tech 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.