Correlation Between Zhejiang Daily and Zoomlion Heavy
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By analyzing existing cross correlation between Zhejiang Daily Media and Zoomlion Heavy Industry, you can compare the effects of market volatilities on Zhejiang Daily and Zoomlion Heavy 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 Daily with a short position of Zoomlion Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Daily and Zoomlion Heavy.
Diversification Opportunities for Zhejiang Daily and Zoomlion Heavy
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Zoomlion is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Daily Media and Zoomlion Heavy Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoomlion Heavy Industry and Zhejiang Daily 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 Daily Media are associated (or correlated) with Zoomlion Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoomlion Heavy Industry has no effect on the direction of Zhejiang Daily i.e., Zhejiang Daily and Zoomlion Heavy go up and down completely randomly.
Pair Corralation between Zhejiang Daily and Zoomlion Heavy
Assuming the 90 days trading horizon Zhejiang Daily Media is expected to generate 1.22 times more return on investment than Zoomlion Heavy. However, Zhejiang Daily is 1.22 times more volatile than Zoomlion Heavy Industry. It trades about 0.08 of its potential returns per unit of risk. Zoomlion Heavy Industry is currently generating about 0.0 per unit of risk. If you would invest 878.00 in Zhejiang Daily Media on September 25, 2024 and sell it today you would earn a total of 192.00 from holding Zhejiang Daily Media or generate 21.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Zhejiang Daily Media vs. Zoomlion Heavy Industry
Performance |
Timeline |
Zhejiang Daily Media |
Zoomlion Heavy Industry |
Zhejiang Daily and Zoomlion Heavy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zhejiang Daily and Zoomlion Heavy
The main advantage of trading using opposite Zhejiang Daily and Zoomlion Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Daily position performs unexpectedly, Zoomlion Heavy 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 Zoomlion Heavy will offset losses from the drop in Zoomlion Heavy's long position.Zhejiang Daily vs. Runjian Communication Co | Zhejiang Daily vs. Eastern Communications Co | Zhejiang Daily vs. China Asset Management | Zhejiang Daily vs. Harbin Hatou Investment |
Zoomlion Heavy vs. Zhejiang Daily Media | Zoomlion Heavy vs. Zhongtong Guomai Communication | Zoomlion Heavy vs. Guangzhou Jinyi Media | Zoomlion Heavy vs. Sichuan Jinshi Technology |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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