Correlation Between Zhong Yang and Blackstar Enterprise

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

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

Diversification Opportunities for Zhong Yang and Blackstar Enterprise

0.16

Correlation Coefficient

Zhong Yang  Blackstar Enterprise

Average diversification

The 3 months correlation between Zhong and Blackstar is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Zhong Yang Financial and Blackstar Enterprise Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstar Enterprise and Zhong Yang 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 Zhong Yang Financial are associated (or correlated) with Blackstar Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstar Enterprise has no effect on the direction of Zhong Yang i.e., Zhong Yang and Blackstar Enterprise go up and down completely randomly.

Pair Corralation between Zhong Yang and Blackstar Enterprise

Considering the 90-day investment horizon Zhong Yang Financial is expected to generate 0.89 times more return on investment than Blackstar Enterprise. However, Zhong Yang Financial is 1.12 times less risky than Blackstar Enterprise. It trades about 0.0 of its potential returns per unit of risk. Blackstar Enterprise Group is currently generating about 0.0 per unit of risk. If you would invest  206.00  in Zhong Yang Financial on September 4, 2024 and sell it today you would lose (42.00) from holding Zhong Yang Financial or give up 20.39% of portfolio value over 90 days.

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

Zhong Yang Financial  vs.  Blackstar Enterprise Group

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 relatively invariable basic indicators, Zhong Yang is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Blackstar Enterprise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackstar Enterprise Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Blackstar Enterprise is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Zhong Yang and Blackstar Enterprise

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

The idea behind Zhong Yang Financial and Blackstar Enterprise Group 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.