Correlation Between Zhejiang Orient and Guangxi Wuzhou
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By analyzing existing cross correlation between Zhejiang Orient Gene and Guangxi Wuzhou Communications, you can compare the effects of market volatilities on Zhejiang Orient and Guangxi Wuzhou 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 Zhejiang Orient with a short position of Guangxi Wuzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Orient and Guangxi Wuzhou.
Diversification Opportunities for Zhejiang Orient and Guangxi Wuzhou
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Zhejiang and Guangxi is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Orient Gene and Guangxi Wuzhou Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangxi Wuzhou Commu and Zhejiang Orient 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 Zhejiang Orient Gene are associated (or correlated) with Guangxi Wuzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangxi Wuzhou Commu has no effect on the direction of Zhejiang Orient i.e., Zhejiang Orient and Guangxi Wuzhou go up and down completely randomly.
Pair Corralation between Zhejiang Orient and Guangxi Wuzhou
Assuming the 90 days trading horizon Zhejiang Orient Gene is expected to under-perform the Guangxi Wuzhou. But the stock apears to be less risky and, when comparing its historical volatility, Zhejiang Orient Gene is 2.29 times less risky than Guangxi Wuzhou. The stock trades about -0.12 of its potential returns per unit of risk. The Guangxi Wuzhou Communications is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 383.00 in Guangxi Wuzhou Communications on September 26, 2024 and sell it today you would earn a total of 176.00 from holding Guangxi Wuzhou Communications or generate 45.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 95.65% |
Values | Daily Returns |
Zhejiang Orient Gene vs. Guangxi Wuzhou Communications
Performance |
Timeline |
Zhejiang Orient Gene |
Guangxi Wuzhou Commu |
Zhejiang Orient and Guangxi Wuzhou Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zhejiang Orient and Guangxi Wuzhou
The main advantage of trading using opposite Zhejiang Orient and Guangxi Wuzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Orient position performs unexpectedly, Guangxi Wuzhou 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 Guangxi Wuzhou will offset losses from the drop in Guangxi Wuzhou's long position.Zhejiang Orient vs. New China Life | Zhejiang Orient vs. Ming Yang Smart | Zhejiang Orient vs. 159681 | Zhejiang Orient vs. 159005 |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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