ZHENYE (000006) Stock Volume - Impact On Prices

| February 7, 2019More Stocks

This report analyzes the impact of recent 52-week volume of ZHENYE (000006) stock on the share prices (and gains). After reading the report, you will be in a better position to assess the future impact of volumes on prices.

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Note: Volume is a measure of the total number of shares traded in the market. These are the tiny bars you will see at the bottom of the conventional price charts.

Below is a table of contents to help you navigate through the report. There are 5 sections in this analysis report.

  1. How ZHENYE (000006) Weekly Volumes Are Affecting Price
  2. Did 30 Highest Volume Days Of 000006 Closed In Profits?
  3. How ZHENYE (000006) Monthly Volumes Are Affecting Price
  4. Volume Of 000006 Vs Similar Stocks
  5. How Annual Volumes Are Affecting 000006 Price

Note: Do you want to know the best performing days, months and weeks of 000006 recently. We recommend you to read the 52-week highs/lows report for 000006.

1 How ZHENYE (000006) Weekly Volumes Are Affecting Price

First, let us see a graph representing the weekly prices and volumes for the recent 52 weeks between 2018-01-28 and 2019-01-28.

Note: Since prices and volumes are on different scales, we have plotted the percentage change in volumes against the percentage change in prices. In other words, each value denotes the difference (%) between the spot volume/price and the initial volume/price at the start of the graph.

ZHENYE (000006) Stcok Current Year Volumes By Weekly

Note: To understand how we created the above graph, here is a table showing sample data.

WeekPrice (Avg.) (¥)Price Change (%)Volumes (Avg.)Volume Change (%)
15.34093221230
98.5760.4958884346532
136.9530.151654163977
176.9029.211274729737
216.7826.971229480532
255.849.369262365-1
295.818.81453302056
335.482.627291331-22
375.553.9344850522381
425.06-5.2421366861129
465.553.9324739888165
505.523.371784415991

Now we are going to see if there is a relationship between weekly average volumes of ZHENYE (000006) shares with that of the stock prices. We are going to check the "Correlation" between weekly volumes and prices.

Note: If the word correlation is new to you, here is a simple explanation. Correlation is a technique that apart from other things gives out a number called the correlation coefficient. This coefficient is a measure of how two variables (in our case price and volume) are related. The coefficient can assume values between -1 to +1. Before measuring the coefficient for 000006 shares, below is a table that will guide to interpret the value.

Value Interpretation
-1 to -0.5. If volume decreases price increases almost always
-0.5 to 0 If volume decreases price increases but not always
0 There is no relationship between volume and price
0 to 0.5 If volume increases price increases but not always
.5 to 1 If volume increases price increases almost always

ZHENYE (000006) Stock's Price-Volume Correlation Coefficient

We are not going show you the elaborate method of finding the correlation coefficient. (You can read about the method in math books.) Instead, we will straightaway let you know the value between the average volume and price of 000006 shares.

Correlation Coefficient Between 000006 weekly volumes and prices = 0.5

Interpretation:

0.5 indicates a no correlation, There is no relationship between volume and price.

2 Did 30 Highest Volume Days Of 000006 Closed In Profits?

Note: *This section uses close and not adjusted close.

High volume corresponds to a high interest over a stock. There can be multiple reasons for people showing extraordinary interest towards a share. Positive news like higher than expected earnings will most certainly increase volumes and prices. Negative news like lower than expected profits and tax hikes can again lead to an increase in volumes (but there will be more selling than buying).

Now let us check if the top 30 highest volume days of ZHENYE (000006) resulted in profits. Below table gives you the data.

DateVolumeOpen (¥)Close (¥)(Close - Open) (¥)Profit/LossGain (%)
2018-03-091119431928.618.80.19Profit2.21
2018-09-20966939825.66.140.54Profit9.64
2018-09-21780547466.045.98-0.06Loss-0.99
2018-03-12738316898.618.650.04Profit0.46
2018-03-15643137808.27.95-0.25Loss-3.05
2018-03-13607777858.658.70.05Profit0.58
2018-03-14596514458.558.29-0.26Loss-3.04
2018-09-25481116865.75.66-0.04Loss-0.70
2018-12-11479709155.665.930.27Profit4.77
2018-11-19432552015.675.810.14Profit2.47
2018-09-28413030375.615.70.09Profit1.60
2018-03-23400418537.527.18-0.34Loss-4.52
2018-12-12368575515.875.86-0.01Loss-0.17
2018-05-08362096697.297.480.19Profit2.61
2018-09-19345978425.085.580.50Profit9.84
2018-05-10344983357.337.560.23Profit3.14
2018-09-27344868005.635.650.02Profit0.36
2018-09-26333216105.75.64-0.06Loss-1.05
2018-11-16325775245.485.520.04Profit0.73
2018-03-29325576447.287.520.24Profit3.30
2018-10-08319035685.495.22-0.27Loss-4.92
2018-12-18318048895.735.47-0.26Loss-4.54
2018-11-15306842635.245.50.26Profit4.96
2018-11-20293993885.665.49-0.17Loss-3.00
2018-10-11282143095.024.71-0.31Loss-6.18
2018-03-21274230377.867.81-0.05Loss-0.64
2018-07-302646967465.96-0.04Loss-0.67
2018-05-11257854167.517.5-0.01Loss-0.13
2018-04-24257671846.877.260.39Profit5.68
2018-03-16257279867.957.94-0.01Loss-0.13

3 How ZHENYE (000006) Monthly Volumes Are Affecting Price

This section is similar to the third section except that now we are going to check the impact of monthly volumes. The timeframe of analysis is similar to that of the first section. We have considered recent 52 weeks of data between 2018-01-28 and 2019-01-28.

Below is the graph showing the monthly volume against monthly price. The graph shows the change (%) in volume against the change (%) in price for you to understand better.

10 Months Price, Volumes Chart -

A sample of data used to create the above graph is shown below.

MonthPrice (¥)Price Change (%)VolumesVolume Change (%)
2019-15.30081015660
2018-125.544.5319293707138
2018-115.310.1917214672112
2018-104.97-6.2318349655126
2018-95.401.8923564519191
2018-85.534.34928738415
2018-75.595.471139964041
2018-66.3519.811049238530
2018-57.1033.9616747301107
2018-46.9230.571499397185
2018-37.6744.7238715812378

The correlation between the monthly volume and price turns out to be 0.49. Therefore we have a week positive correlation, Meaning - If volume increases price increases but not always.

4 Volume Of 000006 Vs Similar Stocks

You already know that volume is a measure of interest in a particular stock. The reason may be good or bad. The higher than average volume can drive prices up or down depending upon the amount of selling compared to buying. This section compares the interest shown by investors in 000006 compared to 5 similar stocks in recent 52 weeks.

TickerStock NameVolumesAvg. Price (¥)Highest Price (¥)Lowest Price (¥)
000401JIDONG CEMENT2892165311.6915.238.39
000006ZHENYE 1509175769.564.67
000040DXLT1264378110.5013.406.69
002375YASHA79370865.777.684.67
002047BAUING DECORATION63709416.547.415.51
000682DONGFANG ELECTRONICS41916583.874.803.01

As you can see in the above table, ZHENYE (000006) can be ranked second on volume scale.

5 How Annual Volumes Are Affecting 000006 Price

This section is similar to the first and third sections. The first section checked the impact of weekly volume on prices while the second section analyzed the impact of monthly volumes. Now we are going to check the impact of annual average volumes. Below is the volume-change vs price-change graph.

10 Year Volumes Chart -

Below table lists a sample of data used to draw the above graph.

YearPrice (Avg.) (¥)Price Change (%)Volumes (Avg.)Volume Change (%)
20001.06097471950
20011.2215.095455855-44
20021.070.943875624-60
20030.77-27.364698719-52
20040.60-43.48234668-16
20050.50-52.836666949-32
20061.136.627984460187
20073.7125035532216265
20082.77161.3223409251140
20093.37217.9237448863284
20103.37217.9236283037272
20113.47227.361644194369
20123.49229.251354858239
20134.18294.341562719360
20144.78350.9423534683141
201510.02845.2855025127465
20168.04658.4931359126222
20178.66716.981394686043
20186.62524.531445830148
20195.304008101566-17

The correlation coefficient between the volume and price is 0.54. This is a strong positive correlation, Meaning - If volume increases price increases almost always.

Summary of correlation coefficients of weekly, monthly and annual volumes against price.

Volume Averaged OverCoefficientMeaning
Weekly0.5no correlation
Monthly0.49week positive
Yearly0.54strong positive

Conclusion :

Volume is an important metric in combination with the price to assess the trend of a stock. For example, if a stock moves steadily up but is associated with feeble volumes, the movement may not be sustainable. On the other hand, if the stock is moving up while the volume is also increasing steadily, the movement will be a sustainable bullish run. Therefore volume plays a key role in assessing the sustainability of a trend.

Recommended Reading:

  1. We strongly recommend you to go through the 000006 Trend Analysis report. That report uses an interesting method involving moving averages to assess trends.
  2. The expectation of a stock rising is the prime reason why investors are behind it. 000006 Stock Rise report will help you know whether the stock is on the rise lately.

Disclaimer:

We have validated the data to the best of our knowledge. If you find data inaccuracies kindly let us know using the contact form so that we can act promptly.

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