Correlation Between Zhuzhou Kibing and JCHX Mining

Can any of the company-specific risk be diversified away by investing in both Zhuzhou Kibing and JCHX Mining 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 Zhuzhou Kibing and JCHX Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Zhuzhou Kibing Group and JCHX Mining Management, you can compare the effects of market volatilities on Zhuzhou Kibing and JCHX Mining 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 Zhuzhou Kibing with a short position of JCHX Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhuzhou Kibing and JCHX Mining.

Diversification Opportunities for Zhuzhou Kibing and JCHX Mining

0.35

Correlation Coefficient

Zhuzhou Kibing  JCHX Mining

Weak diversification

The 3 months correlation between Zhuzhou and JCHX is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Zhuzhou Kibing Group and JCHX Mining Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JCHX Mining Management and Zhuzhou Kibing 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 Zhuzhou Kibing Group are associated (or correlated) with JCHX Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JCHX Mining Management has no effect on the direction of Zhuzhou Kibing i.e., Zhuzhou Kibing and JCHX Mining go up and down completely randomly.

Pair Corralation between Zhuzhou Kibing and JCHX Mining

Assuming the 90 days trading horizon Zhuzhou Kibing Group is expected to generate 1.05 times more return on investment than JCHX Mining. However, Zhuzhou Kibing is 1.05 times more volatile than JCHX Mining Management. It trades about -0.04 of its potential returns per unit of risk. JCHX Mining Management is currently generating about -0.06 per unit of risk. If you would invest  601.00  in Zhuzhou Kibing Group on October 9, 2024 and sell it today you would lose (48.00) from holding Zhuzhou Kibing Group or give up 7.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Zhuzhou Kibing Group  vs.  JCHX Mining Management

Zhuzhou Kibing Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zhuzhou Kibing Group 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.

JCHX Mining Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JCHX Mining Management 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 Zhuzhou Kibing and JCHX Mining

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

The idea behind Zhuzhou Kibing Group and JCHX Mining Management 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.