Correlation Between Zhuzhou CRRC and 159681

Can any of the company-specific risk be diversified away by investing in both Zhuzhou CRRC and 159681 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 Zhuzhou CRRC and 159681 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Zhuzhou CRRC Times and 159681, you can compare the effects of market volatilities on Zhuzhou CRRC and 159681 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 Zhuzhou CRRC with a short position of 159681. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhuzhou CRRC and 159681.

Diversification Opportunities for Zhuzhou CRRC and 159681

0.69

Correlation Coefficient

Zhuzhou CRRC  159681

Poor diversification

The 3 months correlation between Zhuzhou and 159681 is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Zhuzhou CRRC Times and 159681 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 159681 and Zhuzhou CRRC 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 Zhuzhou CRRC Times are associated (or correlated) with 159681. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 159681 has no effect on the direction of Zhuzhou CRRC i.e., Zhuzhou CRRC and 159681 go up and down completely randomly.

Pair Corralation between Zhuzhou CRRC and 159681

Assuming the 90 days trading horizon Zhuzhou CRRC Times is expected to generate 1.0 times more return on investment than 159681. However, Zhuzhou CRRC is 1.0 times more volatile than 159681. It trades about -0.04 of its potential returns per unit of risk. 159681 is currently generating about -0.07 per unit of risk. If you would invest  4,874  in Zhuzhou CRRC Times on September 20, 2024 and sell it today you would lose (90.00) from holding Zhuzhou CRRC Times or give up 1.85% of portfolio value over 90 days.

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

Zhuzhou CRRC Times  vs.  159681

Zhuzhou CRRC Times

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Zhuzhou CRRC Times are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Zhuzhou CRRC sustained solid returns over the last few months and may actually be approaching a breakup point.

159681

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 159681 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 159681 sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zhuzhou CRRC and 159681

The main advantage of trading using opposite Zhuzhou CRRC and 159681 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhuzhou CRRC position performs unexpectedly, 159681 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 159681 will offset losses from the drop in 159681's long position.

The idea behind Zhuzhou CRRC Times and 159681 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .