Correlation Between Zhengzhou Coal and Guangxi Wuzhou
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By analyzing existing cross correlation between Zhengzhou Coal Mining and Guangxi Wuzhou Communications, you can compare the effects of market volatilities on Zhengzhou Coal and Guangxi Wuzhou 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 Guangxi Wuzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhengzhou Coal and Guangxi Wuzhou.
Diversification Opportunities for Zhengzhou Coal and Guangxi Wuzhou
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Zhengzhou and Guangxi is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Zhengzhou Coal Mining and Guangxi Wuzhou Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangxi Wuzhou Commu 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 Guangxi Wuzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangxi Wuzhou Commu has no effect on the direction of Zhengzhou Coal i.e., Zhengzhou Coal and Guangxi Wuzhou go up and down completely randomly.
Pair Corralation between Zhengzhou Coal and Guangxi Wuzhou
Assuming the 90 days trading horizon Zhengzhou Coal is expected to generate 6.45 times less return on investment than Guangxi Wuzhou. But when comparing it to its historical volatility, Zhengzhou Coal Mining is 1.3 times less risky than Guangxi Wuzhou. It trades about 0.01 of its potential returns per unit of risk. Guangxi Wuzhou Communications is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 373.00 in Guangxi Wuzhou Communications on October 5, 2024 and sell it today you would earn a total of 106.00 from holding Guangxi Wuzhou Communications or generate 28.42% 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. Guangxi Wuzhou Communications
Performance |
Timeline |
Zhengzhou Coal Mining |
Guangxi Wuzhou Commu |
Zhengzhou Coal and Guangxi Wuzhou Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zhengzhou Coal and Guangxi Wuzhou
The main advantage of trading using opposite Zhengzhou Coal and Guangxi Wuzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhengzhou Coal position performs unexpectedly, Guangxi Wuzhou 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 Guangxi Wuzhou will offset losses from the drop in Guangxi Wuzhou's long position.Zhengzhou Coal vs. Industrial and Commercial | Zhengzhou Coal vs. China Construction Bank | Zhengzhou Coal vs. Agricultural Bank of | Zhengzhou Coal vs. Bank of China |
Guangxi Wuzhou vs. Industrial and Commercial | Guangxi Wuzhou vs. China Construction Bank | Guangxi Wuzhou vs. Agricultural Bank of | Guangxi Wuzhou vs. Bank of China |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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