Correlation Between Zhejiang Daily and Western Metal
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By analyzing existing cross correlation between Zhejiang Daily Media and Western Metal Materials, you can compare the effects of market volatilities on Zhejiang Daily and Western Metal 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 Western Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Daily and Western Metal.
Diversification Opportunities for Zhejiang Daily and Western Metal
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Western is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Daily Media and Western Metal Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Metal Materials 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 Western Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Metal Materials has no effect on the direction of Zhejiang Daily i.e., Zhejiang Daily and Western Metal go up and down completely randomly.
Pair Corralation between Zhejiang Daily and Western Metal
Assuming the 90 days trading horizon Zhejiang Daily Media is expected to generate 1.3 times more return on investment than Western Metal. However, Zhejiang Daily is 1.3 times more volatile than Western Metal Materials. It trades about 0.03 of its potential returns per unit of risk. Western Metal Materials is currently generating about 0.02 per unit of risk. If you would invest 874.00 in Zhejiang Daily Media on September 26, 2024 and sell it today you would earn a total of 187.00 from holding Zhejiang Daily Media or generate 21.4% 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. Western Metal Materials
Performance |
Timeline |
Zhejiang Daily Media |
Western Metal Materials |
Zhejiang Daily and Western Metal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zhejiang Daily and Western Metal
The main advantage of trading using opposite Zhejiang Daily and Western Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Daily position performs unexpectedly, Western Metal 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 Western Metal will offset losses from the drop in Western Metal's long position.Zhejiang Daily vs. Western Metal Materials | Zhejiang Daily vs. Senci Electric Machinery | Zhejiang Daily vs. Xingguang Agricultural Mach | Zhejiang Daily vs. Kangxin New Materials |
Western Metal vs. Zhejiang Construction Investment | Western Metal vs. Chengdu Xingrong Investment | Western Metal vs. Glodon Software Co | Western Metal vs. Heilongjiang Transport Development |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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