Correlation Between Dawning Information and Zhongtong Guomai
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By analyzing existing cross correlation between Dawning Information Industry and Zhongtong Guomai Communication, you can compare the effects of market volatilities on Dawning Information and Zhongtong Guomai 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 Dawning Information with a short position of Zhongtong Guomai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dawning Information and Zhongtong Guomai.
Diversification Opportunities for Dawning Information and Zhongtong Guomai
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dawning and Zhongtong is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Dawning Information Industry and Zhongtong Guomai Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongtong Guomai Com and Dawning Information 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 Dawning Information Industry are associated (or correlated) with Zhongtong Guomai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongtong Guomai Com has no effect on the direction of Dawning Information i.e., Dawning Information and Zhongtong Guomai go up and down completely randomly.
Pair Corralation between Dawning Information and Zhongtong Guomai
Assuming the 90 days trading horizon Dawning Information is expected to generate 1.72 times less return on investment than Zhongtong Guomai. But when comparing it to its historical volatility, Dawning Information Industry is 1.0 times less risky than Zhongtong Guomai. It trades about 0.16 of its potential returns per unit of risk. Zhongtong Guomai Communication is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 361.00 in Zhongtong Guomai Communication on September 7, 2024 and sell it today you would earn a total of 788.00 from holding Zhongtong Guomai Communication or generate 218.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Dawning Information Industry vs. Zhongtong Guomai Communication
Performance |
Timeline |
Dawning Information |
Zhongtong Guomai Com |
Dawning Information and Zhongtong Guomai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dawning Information and Zhongtong Guomai
The main advantage of trading using opposite Dawning Information and Zhongtong Guomai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dawning Information position performs unexpectedly, Zhongtong Guomai 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 Zhongtong Guomai will offset losses from the drop in Zhongtong Guomai's long position.Dawning Information vs. Industrial and Commercial | Dawning Information vs. Agricultural Bank of | Dawning Information vs. China Construction Bank | Dawning Information vs. Bank of China |
Zhongtong Guomai vs. Industrial and Commercial | Zhongtong Guomai vs. Agricultural Bank of | Zhongtong Guomai vs. China Construction Bank | Zhongtong Guomai vs. Bank of China |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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