Correlation Between HMTNew Technical and Zhejiang JIULI

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

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

Diversification Opportunities for HMTNew Technical and Zhejiang JIULI

0.0

Correlation Coefficient

HMTNew Technical  Zhejiang JIULI

Pay attention - limited upside

The 3 months correlation between HMTNew and Zhejiang is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HMTNew Technical 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 HMTNew Technical 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 HMTNew Technical 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 HMTNew Technical i.e., HMTNew Technical and Zhejiang JIULI go up and down completely randomly.

Pair Corralation between HMTNew Technical and Zhejiang JIULI

If you would invest  1,917  in Zhejiang JIULI Hi tech on September 14, 2024 and sell it today you would earn a total of  475.00  from holding Zhejiang JIULI Hi tech or generate 24.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

HMTNew Technical  vs.  Zhejiang JIULI Hi tech

HMTNew Technical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HMTNew Technical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HMTNew Technical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Zhejiang JIULI Hi

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zhejiang JIULI Hi tech are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Zhejiang JIULI sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HMTNew Technical and Zhejiang JIULI

The main advantage of trading using opposite HMTNew Technical and Zhejiang JIULI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMTNew Technical 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 HMTNew Technical 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.