Correlation Between Interactive Brokers and Zhong Yang

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

By analyzing existing cross correlation between Interactive Brokers Group and Zhong Yang Financial, you can compare the effects of market volatilities on Interactive Brokers and Zhong Yang 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 Interactive Brokers with a short position of Zhong Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interactive Brokers and Zhong Yang.

Diversification Opportunities for Interactive Brokers and Zhong Yang

-0.69

Correlation Coefficient

Interactive Brokers  Zhong Yang

Excellent diversification

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

Pair Corralation between Interactive Brokers and Zhong Yang

Given the investment horizon of 90 days Interactive Brokers is expected to generate 5.35 times less return on investment than Zhong Yang. But when comparing it to its historical volatility, Interactive Brokers Group is 13.66 times less risky than Zhong Yang. It trades about 0.11 of its potential returns per unit of risk. Zhong Yang Financial is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  495.00  in Zhong Yang Financial on October 9, 2024 and sell it today you would lose (330.00) from holding Zhong Yang Financial or give up 66.67% of portfolio value over 90 days.

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

Interactive Brokers Group  vs.  Zhong Yang Financial

Interactive Brokers

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Interactive Brokers Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain forward-looking signals, Interactive Brokers reported solid returns over the last few months and may actually be approaching a breakup point.

Zhong Yang Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zhong Yang Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Interactive Brokers and Zhong Yang

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

The idea behind Interactive Brokers Group and Zhong Yang Financial 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.