Correlation Between Heilongjiang Publishing and Zhejiang Publishing

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

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

Diversification Opportunities for Heilongjiang Publishing and Zhejiang Publishing

0.29

Correlation Coefficient

Heilongjiang Publishing  Zhejiang Publishing

Modest diversification

The 3 months correlation between Heilongjiang and Zhejiang is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Heilongjiang Publishing Media and Zhejiang Publishing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Publishing Media and Heilongjiang 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 Heilongjiang Publishing Media are associated (or correlated) with Zhejiang Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Publishing Media has no effect on the direction of Heilongjiang Publishing i.e., Heilongjiang Publishing and Zhejiang Publishing go up and down completely randomly.

Pair Corralation between Heilongjiang Publishing and Zhejiang Publishing

Assuming the 90 days trading horizon Heilongjiang Publishing Media is expected to generate 1.28 times more return on investment than Zhejiang Publishing. However, Heilongjiang Publishing is 1.28 times more volatile than Zhejiang Publishing Media. It trades about 0.19 of its potential returns per unit of risk. Zhejiang Publishing Media is currently generating about 0.07 per unit of risk. If you would invest  1,220  in Heilongjiang Publishing Media on September 14, 2024 and sell it today you would earn a total of  507.00  from holding Heilongjiang Publishing Media or generate 41.56% return on investment over 90 days.

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

Heilongjiang Publishing Media  vs.  Zhejiang Publishing Media

Heilongjiang Publishing

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Heilongjiang Publishing Media are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Heilongjiang Publishing sustained solid returns over the last few months and may actually be approaching a breakup point.

Zhejiang Publishing Media

Risk-Adjusted Performance

5 of 100

Modest

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

Pair Trading with Heilongjiang Publishing and Zhejiang Publishing

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

The idea behind Heilongjiang Publishing Media and Zhejiang Publishing Media 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..