Correlation Between Zhengzhou Coal and Aerospace
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By analyzing existing cross correlation between Zhengzhou Coal Mining and Aerospace Hi Tech Holding, you can compare the effects of market volatilities on Zhengzhou Coal and Aerospace 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 Zhengzhou Coal with a short position of Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhengzhou Coal and Aerospace.
Diversification Opportunities for Zhengzhou Coal and Aerospace
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhengzhou and Aerospace is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Zhengzhou Coal Mining and Aerospace Hi Tech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerospace Hi Tech and Zhengzhou Coal 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 Zhengzhou Coal Mining are associated (or correlated) with Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerospace Hi Tech has no effect on the direction of Zhengzhou Coal i.e., Zhengzhou Coal and Aerospace go up and down completely randomly.
Pair Corralation between Zhengzhou Coal and Aerospace
Assuming the 90 days trading horizon Zhengzhou Coal Mining is expected to generate 0.62 times more return on investment than Aerospace. However, Zhengzhou Coal Mining is 1.6 times less risky than Aerospace. It trades about 0.23 of its potential returns per unit of risk. Aerospace Hi Tech Holding is currently generating about -0.04 per unit of risk. If you would invest 1,230 in Zhengzhou Coal Mining on September 25, 2024 and sell it today you would earn a total of 73.00 from holding Zhengzhou Coal Mining or generate 5.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Zhengzhou Coal Mining vs. Aerospace Hi Tech Holding
Performance |
Timeline |
Zhengzhou Coal Mining |
Aerospace Hi Tech |
Zhengzhou Coal and Aerospace Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zhengzhou Coal and Aerospace
The main advantage of trading using opposite Zhengzhou Coal and Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhengzhou Coal position performs unexpectedly, Aerospace 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 Aerospace will offset losses from the drop in Aerospace's long position.Zhengzhou Coal vs. Dirui Industrial Co | Zhengzhou Coal vs. Western Metal Materials | Zhengzhou Coal vs. Daoming OpticsChemical Co | Zhengzhou Coal vs. Guizhou Chanhen Chemical |
Aerospace vs. Beijing Bashi Media | Aerospace vs. Qumei Furniture Group | Aerospace vs. Mango Excellent Media | Aerospace vs. Fiberhome Telecommunication Technologies |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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