Correlation Between ZhongAn Online and SSMTF

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

By analyzing existing cross correlation between ZhongAn Online P and SSMTF, you can compare the effects of market volatilities on ZhongAn Online and SSMTF 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 ZhongAn Online with a short position of SSMTF. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZhongAn Online and SSMTF.

Diversification Opportunities for ZhongAn Online and SSMTF

0.0

Correlation Coefficient

ZhongAn Online  SSMTF

Pay attention - limited upside

The 3 months correlation between ZhongAn and SSMTF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ZhongAn Online P and SSMTF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSMTF and ZhongAn Online 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 ZhongAn Online P are associated (or correlated) with SSMTF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSMTF has no effect on the direction of ZhongAn Online i.e., ZhongAn Online and SSMTF go up and down completely randomly.

Pair Corralation between ZhongAn Online and SSMTF

If you would invest  0.15  in SSMTF on October 26, 2024 and sell it today you would earn a total of  0.00  from holding SSMTF or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	55.93%
Values	Daily Returns

ZhongAn Online P  vs.  SSMTF

ZhongAn Online P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZhongAn Online P has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

SSMTF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSMTF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SSMTF is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ZhongAn Online and SSMTF

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

The idea behind ZhongAn Online P and SSMTF 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.