Correlation Between Gohigh Data and Zhengzhou Coal

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

By analyzing existing cross correlation between Gohigh Data Networks and Zhengzhou Coal Mining, you can compare the effects of market volatilities on Gohigh Data and Zhengzhou Coal 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 Gohigh Data with a short position of Zhengzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gohigh Data and Zhengzhou Coal.

Diversification Opportunities for Gohigh Data and Zhengzhou Coal

-0.53

Correlation Coefficient

Gohigh Data  Zhengzhou Coal

Excellent diversification

The 3 months correlation between Gohigh and Zhengzhou is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Gohigh Data Networks and Zhengzhou Coal Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhengzhou Coal Mining and Gohigh Data 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 Gohigh Data Networks are associated (or correlated) with Zhengzhou Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhengzhou Coal Mining has no effect on the direction of Gohigh Data i.e., Gohigh Data and Zhengzhou Coal go up and down completely randomly.

Pair Corralation between Gohigh Data and Zhengzhou Coal

Assuming the 90 days trading horizon Gohigh Data Networks is expected to under-perform the Zhengzhou Coal. In addition to that, Gohigh Data is 1.67 times more volatile than Zhengzhou Coal Mining. It trades about -0.1 of its total potential returns per unit of risk. Zhengzhou Coal Mining is currently generating about 0.13 per unit of volatility. If you would invest  1,320  in Zhengzhou Coal Mining on December 25, 2024 and sell it today you would earn a total of  192.00  from holding Zhengzhou Coal Mining or generate 14.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.28%
Values	Daily Returns

Gohigh Data Networks  vs.  Zhengzhou Coal Mining

Gohigh Data Networks

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gohigh Data Networks 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Zhengzhou Coal Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zhengzhou Coal Mining are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Zhengzhou Coal sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gohigh Data and Zhengzhou Coal

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

The idea behind Gohigh Data Networks and Zhengzhou Coal Mining 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.