Correlation Between Zhejiang Daily and Maccura Biotechnology

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

By analyzing existing cross correlation between Zhejiang Daily Media and Maccura Biotechnology Co, you can compare the effects of market volatilities on Zhejiang Daily and Maccura Biotechnology 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 Maccura Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Daily and Maccura Biotechnology.

Diversification Opportunities for Zhejiang Daily and Maccura Biotechnology

-0.03

Correlation Coefficient

Zhejiang Daily  Maccura Biotechnology

Good diversification

The 3 months correlation between Zhejiang and Maccura is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Daily Media and Maccura Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maccura Biotechnology 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 Maccura Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maccura Biotechnology has no effect on the direction of Zhejiang Daily i.e., Zhejiang Daily and Maccura Biotechnology go up and down completely randomly.

Pair Corralation between Zhejiang Daily and Maccura Biotechnology

Assuming the 90 days trading horizon Zhejiang Daily Media is expected to generate 3.11 times more return on investment than Maccura Biotechnology. However, Zhejiang Daily is 3.11 times more volatile than Maccura Biotechnology Co. It trades about 0.12 of its potential returns per unit of risk. Maccura Biotechnology Co is currently generating about -0.08 per unit of risk. If you would invest  1,079  in Zhejiang Daily Media on December 4, 2024 and sell it today you would earn a total of  337.00  from holding Zhejiang Daily Media or generate 31.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Zhejiang Daily Media  vs.  Maccura Biotechnology Co

Zhejiang Daily Media

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zhejiang Daily Media are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Zhejiang Daily sustained solid returns over the last few months and may actually be approaching a breakup point.

Maccura Biotechnology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maccura Biotechnology Co 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 Zhejiang Daily and Maccura Biotechnology

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

The idea behind Zhejiang Daily Media and Maccura Biotechnology Co 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.