Correlation Between Zhengzhou Coal and Jiangxi Selon
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By analyzing existing cross correlation between Zhengzhou Coal Mining and Jiangxi Selon Industrial, you can compare the effects of market volatilities on Zhengzhou Coal and Jiangxi Selon 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 Jiangxi Selon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhengzhou Coal and Jiangxi Selon.
Diversification Opportunities for Zhengzhou Coal and Jiangxi Selon
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Zhengzhou and Jiangxi is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Zhengzhou Coal Mining and Jiangxi Selon Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Selon Industrial 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 Jiangxi Selon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Selon Industrial has no effect on the direction of Zhengzhou Coal i.e., Zhengzhou Coal and Jiangxi Selon go up and down completely randomly.
Pair Corralation between Zhengzhou Coal and Jiangxi Selon
Assuming the 90 days trading horizon Zhengzhou Coal Mining is expected to under-perform the Jiangxi Selon. But the stock apears to be less risky and, when comparing its historical volatility, Zhengzhou Coal Mining is 1.22 times less risky than Jiangxi Selon. The stock trades about -0.06 of its potential returns per unit of risk. The Jiangxi Selon Industrial is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 597.00 in Jiangxi Selon Industrial on October 3, 2024 and sell it today you would earn a total of 215.00 from holding Jiangxi Selon Industrial or generate 36.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Zhengzhou Coal Mining vs. Jiangxi Selon Industrial
Performance |
Timeline |
Zhengzhou Coal Mining |
Jiangxi Selon Industrial |
Zhengzhou Coal and Jiangxi Selon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zhengzhou Coal and Jiangxi Selon
The main advantage of trading using opposite Zhengzhou Coal and Jiangxi Selon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhengzhou Coal position performs unexpectedly, Jiangxi Selon 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 Jiangxi Selon will offset losses from the drop in Jiangxi Selon's long position.Zhengzhou Coal vs. Cultural Investment Holdings | ||
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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