Correlation Between Jizhong Energy and CSG Holding

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

By analyzing existing cross correlation between Jizhong Energy Resources and CSG Holding Co, you can compare the effects of market volatilities on Jizhong Energy and CSG Holding 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 Jizhong Energy with a short position of CSG Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jizhong Energy and CSG Holding.

Diversification Opportunities for Jizhong Energy and CSG Holding

0.0

Correlation Coefficient

Jizhong Energy  CSG Holding

Pay attention - limited upside

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

Pair Corralation between Jizhong Energy and CSG Holding

Assuming the 90 days trading horizon Jizhong Energy Resources is expected to generate 2.45 times more return on investment than CSG Holding. However, Jizhong Energy is 2.45 times more volatile than CSG Holding Co. It trades about 0.05 of its potential returns per unit of risk. CSG Holding Co is currently generating about 0.03 per unit of risk. If you would invest  614.00  in Jizhong Energy Resources on September 27, 2024 and sell it today you would earn a total of  11.00  from holding Jizhong Energy Resources or generate 1.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Jizhong Energy Resources  vs.  CSG Holding Co

Jizhong Energy Resources

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jizhong Energy Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jizhong Energy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

CSG Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSG Holding Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Jizhong Energy and CSG Holding

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

The idea behind Jizhong Energy Resources and CSG Holding Co 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.