Correlation Between Qi An and Zhejiang Kingland

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

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

Diversification Opportunities for Qi An and Zhejiang Kingland

0.91

Correlation Coefficient

Qi An  Zhejiang Kingland

Almost no diversification

The 3 months correlation between 688561 and Zhejiang is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Qi An Xin and Zhejiang Kingland Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Kingland and Qi An 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 Qi An Xin are associated (or correlated) with Zhejiang Kingland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Kingland has no effect on the direction of Qi An i.e., Qi An and Zhejiang Kingland go up and down completely randomly.

Pair Corralation between Qi An and Zhejiang Kingland

Assuming the 90 days trading horizon Qi An Xin is expected to under-perform the Zhejiang Kingland. In addition to that, Qi An is 1.72 times more volatile than Zhejiang Kingland Pipeline. It trades about -0.09 of its total potential returns per unit of risk. Zhejiang Kingland Pipeline is currently generating about -0.05 per unit of volatility. If you would invest  629.00  in Zhejiang Kingland Pipeline on September 20, 2024 and sell it today you would lose (13.00) from holding Zhejiang Kingland Pipeline or give up 2.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.65%
Values	Daily Returns

Qi An Xin  vs.  Zhejiang Kingland Pipeline

Qi An Xin

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Qi An Xin are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Qi An sustained solid returns over the last few months and may actually be approaching a breakup point.

Zhejiang Kingland

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zhejiang Kingland Pipeline are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Zhejiang Kingland sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Qi An and Zhejiang Kingland

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

The idea behind Qi An Xin and Zhejiang Kingland Pipeline 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.