Correlation Between Bengang Steel and Zoomlion Heavy
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By analyzing existing cross correlation between Bengang Steel Plates and Zoomlion Heavy Industry, you can compare the effects of market volatilities on Bengang Steel and Zoomlion Heavy 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 Bengang Steel with a short position of Zoomlion Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bengang Steel and Zoomlion Heavy.
Diversification Opportunities for Bengang Steel and Zoomlion Heavy
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bengang and Zoomlion is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bengang Steel Plates and Zoomlion Heavy Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoomlion Heavy Industry and Bengang Steel 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 Bengang Steel Plates are associated (or correlated) with Zoomlion Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoomlion Heavy Industry has no effect on the direction of Bengang Steel i.e., Bengang Steel and Zoomlion Heavy go up and down completely randomly.
Pair Corralation between Bengang Steel and Zoomlion Heavy
Assuming the 90 days trading horizon Bengang Steel Plates is expected to generate 1.48 times more return on investment than Zoomlion Heavy. However, Bengang Steel is 1.48 times more volatile than Zoomlion Heavy Industry. It trades about 0.12 of its potential returns per unit of risk. Zoomlion Heavy Industry is currently generating about 0.07 per unit of risk. If you would invest 268.00 in Bengang Steel Plates on September 24, 2024 and sell it today you would earn a total of 67.00 from holding Bengang Steel Plates or generate 25.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Bengang Steel Plates vs. Zoomlion Heavy Industry
Performance |
Timeline |
Bengang Steel Plates |
Zoomlion Heavy Industry |
Bengang Steel and Zoomlion Heavy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bengang Steel and Zoomlion Heavy
The main advantage of trading using opposite Bengang Steel and Zoomlion Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bengang Steel position performs unexpectedly, Zoomlion Heavy 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 Zoomlion Heavy will offset losses from the drop in Zoomlion Heavy's long position.Bengang Steel vs. Wanhua Chemical Group | Bengang Steel vs. Baoshan Iron Steel | Bengang Steel vs. Shandong Gold Mining | Bengang Steel vs. Rongsheng Petrochemical Co |
Zoomlion Heavy vs. Industrial and Commercial | Zoomlion Heavy vs. Agricultural Bank of | Zoomlion Heavy vs. China Construction Bank | Zoomlion Heavy vs. Bank of China |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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