Correlation Between 360 Security and Zhejiang JIULI

Can any of the company-specific risk be diversified away by investing in both 360 Security 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 360 Security and Zhejiang JIULI into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 360 Security Technology and Zhejiang JIULI Hi tech, you can compare the effects of market volatilities on 360 Security 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 360 Security with a short position of Zhejiang JIULI. Check out your portfolio center. Please also check ongoing floating volatility patterns of 360 Security and Zhejiang JIULI.

Diversification Opportunities for 360 Security and Zhejiang JIULI

0.66

Correlation Coefficient

360 Security  Zhejiang JIULI

Poor diversification

The 3 months correlation between 360 and Zhejiang is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding 360 Security Technology 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 360 Security 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 360 Security Technology 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 360 Security i.e., 360 Security and Zhejiang JIULI go up and down completely randomly.

Pair Corralation between 360 Security and Zhejiang JIULI

Assuming the 90 days trading horizon 360 Security Technology is expected to under-perform the Zhejiang JIULI. In addition to that, 360 Security is 2.21 times more volatile than Zhejiang JIULI Hi tech. It trades about -0.66 of its total potential returns per unit of risk. Zhejiang JIULI Hi tech is currently generating about -0.28 per unit of volatility. If you would invest  2,470  in Zhejiang JIULI Hi tech on October 11, 2024 and sell it today you would lose (151.00) from holding Zhejiang JIULI Hi tech or give up 6.11% of portfolio value over 90 days.

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

360 Security Technology  vs.  Zhejiang JIULI Hi tech

360 Security Technology

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in 360 Security Technology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 360 Security sustained solid returns over the last few months and may actually be approaching a breakup point.

Zhejiang JIULI Hi

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Zhejiang JIULI Hi tech are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Zhejiang JIULI may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with 360 Security and Zhejiang JIULI

The main advantage of trading using opposite 360 Security and Zhejiang JIULI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 360 Security 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 360 Security Technology 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.