Correlation Between Zhongrun Resources and Northking Information

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Zhongrun Resources and Northking Information 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 Zhongrun Resources and Northking Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zhongrun Resources Investment and Northking Information Technology, you can compare the effects of market volatilities on Zhongrun Resources and Northking Information 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 Zhongrun Resources with a short position of Northking Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongrun Resources and Northking Information.

Diversification Opportunities for Zhongrun Resources and Northking Information

-0.44
  Correlation Coefficient

Very good diversification

The 3 months correlation between Zhongrun and Northking is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Zhongrun Resources Investment and Northking Information Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northking Information and Zhongrun Resources 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 Zhongrun Resources Investment are associated (or correlated) with Northking Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northking Information has no effect on the direction of Zhongrun Resources i.e., Zhongrun Resources and Northking Information go up and down completely randomly.

Pair Corralation between Zhongrun Resources and Northking Information

Assuming the 90 days trading horizon Zhongrun Resources Investment is expected to generate 1.33 times more return on investment than Northking Information. However, Zhongrun Resources is 1.33 times more volatile than Northking Information Technology. It trades about 0.25 of its potential returns per unit of risk. Northking Information Technology is currently generating about -0.35 per unit of risk. If you would invest  321.00  in Zhongrun Resources Investment on October 13, 2024 and sell it today you would earn a total of  68.00  from holding Zhongrun Resources Investment or generate 21.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Zhongrun Resources Investment  vs.  Northking Information Technolo

 Performance 
       Timeline  
Zhongrun Resources 

Risk-Adjusted Performance

30 of 100

 
Weak
 
Strong
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Zhongrun Resources Investment are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Zhongrun Resources sustained solid returns over the last few months and may actually be approaching a breakup point.
Northking Information 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Northking Information Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat 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.

Zhongrun Resources and Northking Information Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Zhongrun Resources and Northking Information

The main advantage of trading using opposite Zhongrun Resources and Northking Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongrun Resources position performs unexpectedly, Northking Information 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 Northking Information will offset losses from the drop in Northking Information's long position.
The idea behind Zhongrun Resources Investment and Northking Information Technology 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

Other Complementary Tools

Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years