Correlation Between CHINA EDUCATION and ZION OIL

Can any of the company-specific risk be diversified away by investing in both CHINA EDUCATION and ZION OIL 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 CHINA EDUCATION and ZION OIL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CHINA EDUCATION GROUP and ZION OIL GAS, you can compare the effects of market volatilities on CHINA EDUCATION and ZION OIL 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 CHINA EDUCATION with a short position of ZION OIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA EDUCATION and ZION OIL.

Diversification Opportunities for CHINA EDUCATION and ZION OIL

0.0

Correlation Coefficient

CHINA EDUCATION  ZION OIL

Pay attention - limited upside

The 3 months correlation between CHINA and ZION is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHINA EDUCATION GROUP and ZION OIL GAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZION OIL GAS and CHINA EDUCATION 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 CHINA EDUCATION GROUP are associated (or correlated) with ZION OIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZION OIL GAS has no effect on the direction of CHINA EDUCATION i.e., CHINA EDUCATION and ZION OIL go up and down completely randomly.

Pair Corralation between CHINA EDUCATION and ZION OIL

If you would invest  2.75  in ZION OIL GAS on December 26, 2024 and sell it today you would earn a total of  0.00  from holding ZION OIL GAS or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CHINA EDUCATION GROUP  vs.  ZION OIL GAS

CHINA EDUCATION GROUP

Risk-Adjusted Performance

Very Weak

Over the last 90 days CHINA EDUCATION GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

ZION OIL GAS

Risk-Adjusted Performance

Very Weak

Over the last 90 days ZION OIL GAS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ZION OIL is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CHINA EDUCATION and ZION OIL

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

The idea behind CHINA EDUCATION GROUP and ZION OIL GAS 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.