Correlation Between Guangdong Skychem and Zoomlion Heavy
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By analyzing existing cross correlation between Guangdong Skychem Technology and Zoomlion Heavy Industry, you can compare the effects of market volatilities on Guangdong Skychem and Zoomlion Heavy 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 Guangdong Skychem with a short position of Zoomlion Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Skychem and Zoomlion Heavy.
Diversification Opportunities for Guangdong Skychem and Zoomlion Heavy
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Zoomlion is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Skychem Technology and Zoomlion Heavy Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoomlion Heavy Industry and Guangdong Skychem 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 Guangdong Skychem Technology are associated (or correlated) with Zoomlion Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoomlion Heavy Industry has no effect on the direction of Guangdong Skychem i.e., Guangdong Skychem and Zoomlion Heavy go up and down completely randomly.
Pair Corralation between Guangdong Skychem and Zoomlion Heavy
Assuming the 90 days trading horizon Guangdong Skychem Technology is expected to generate 2.16 times more return on investment than Zoomlion Heavy. However, Guangdong Skychem is 2.16 times more volatile than Zoomlion Heavy Industry. It trades about 0.02 of its potential returns per unit of risk. Zoomlion Heavy Industry is currently generating about -0.02 per unit of risk. If you would invest 12,751 in Guangdong Skychem Technology on September 24, 2024 and sell it today you would earn a total of 71.00 from holding Guangdong Skychem Technology or generate 0.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Guangdong Skychem Technology vs. Zoomlion Heavy Industry
Performance |
Timeline |
Guangdong Skychem |
Zoomlion Heavy Industry |
Guangdong Skychem and Zoomlion Heavy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangdong Skychem and Zoomlion Heavy
The main advantage of trading using opposite Guangdong Skychem and Zoomlion Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Skychem position performs unexpectedly, Zoomlion Heavy 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 Zoomlion Heavy will offset losses from the drop in Zoomlion Heavy's long position.Guangdong Skychem vs. Industrial and Commercial | Guangdong Skychem vs. Kweichow Moutai Co | Guangdong Skychem vs. Agricultural Bank of | Guangdong Skychem vs. China Mobile Limited |
Zoomlion Heavy vs. Industrial and Commercial | Zoomlion Heavy vs. Agricultural Bank of | Zoomlion Heavy vs. China Construction Bank | Zoomlion Heavy vs. Bank of China |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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