Correlation Between Zoje Resources and Shaanxi Construction
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By analyzing existing cross correlation between Zoje Resources Investment and Shaanxi Construction Machinery, you can compare the effects of market volatilities on Zoje Resources and Shaanxi Construction 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 Zoje Resources with a short position of Shaanxi Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoje Resources and Shaanxi Construction.
Diversification Opportunities for Zoje Resources and Shaanxi Construction
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zoje and Shaanxi is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Zoje Resources Investment and Shaanxi Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Construction and Zoje 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 Zoje Resources Investment are associated (or correlated) with Shaanxi Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Construction has no effect on the direction of Zoje Resources i.e., Zoje Resources and Shaanxi Construction go up and down completely randomly.
Pair Corralation between Zoje Resources and Shaanxi Construction
Assuming the 90 days trading horizon Zoje Resources Investment is expected to generate 1.05 times more return on investment than Shaanxi Construction. However, Zoje Resources is 1.05 times more volatile than Shaanxi Construction Machinery. It trades about 0.15 of its potential returns per unit of risk. Shaanxi Construction Machinery is currently generating about 0.08 per unit of risk. If you would invest 188.00 in Zoje Resources Investment on October 10, 2024 and sell it today you would earn a total of 81.00 from holding Zoje Resources Investment or generate 43.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Zoje Resources Investment vs. Shaanxi Construction Machinery
Performance |
Timeline |
Zoje Resources Investment |
Shaanxi Construction |
Zoje Resources and Shaanxi Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zoje Resources and Shaanxi Construction
The main advantage of trading using opposite Zoje Resources and Shaanxi Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoje Resources position performs unexpectedly, Shaanxi Construction 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 Shaanxi Construction will offset losses from the drop in Shaanxi Construction's long position.Zoje Resources vs. Heilongjiang Transport Development | Zoje Resources vs. Sichuan Fulin Transportation | Zoje Resources vs. Tibet Huayu Mining | Zoje Resources vs. Xinjiang Baodi Mining |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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