Correlation Between Changjiang Publishing and Zhejiang Tailin

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

By analyzing existing cross correlation between Changjiang Publishing Media and Zhejiang Tailin Bioengineering, you can compare the effects of market volatilities on Changjiang Publishing and Zhejiang Tailin 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 Changjiang Publishing with a short position of Zhejiang Tailin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changjiang Publishing and Zhejiang Tailin.

Diversification Opportunities for Changjiang Publishing and Zhejiang Tailin

-0.33

Correlation Coefficient

Changjiang Publishing  Zhejiang Tailin

Very good diversification

The 3 months correlation between Changjiang and Zhejiang is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Changjiang Publishing Media and Zhejiang Tailin Bioengineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Tailin Bioe and Changjiang Publishing 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 Changjiang Publishing Media are associated (or correlated) with Zhejiang Tailin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Tailin Bioe has no effect on the direction of Changjiang Publishing i.e., Changjiang Publishing and Zhejiang Tailin go up and down completely randomly.

Pair Corralation between Changjiang Publishing and Zhejiang Tailin

Assuming the 90 days trading horizon Changjiang Publishing Media is expected to generate 0.51 times more return on investment than Zhejiang Tailin. However, Changjiang Publishing Media is 1.97 times less risky than Zhejiang Tailin. It trades about 0.04 of its potential returns per unit of risk. Zhejiang Tailin Bioengineering is currently generating about -0.01 per unit of risk. If you would invest  819.00  in Changjiang Publishing Media on October 3, 2024 and sell it today you would earn a total of  138.00  from holding Changjiang Publishing Media or generate 16.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.61%
Values	Daily Returns

Changjiang Publishing Media  vs.  Zhejiang Tailin Bioengineering

Changjiang Publishing

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Changjiang Publishing Media are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Changjiang Publishing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Zhejiang Tailin Bioe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zhejiang Tailin Bioengineering 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Changjiang Publishing and Zhejiang Tailin

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

The idea behind Changjiang Publishing Media and Zhejiang Tailin Bioengineering 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.