Correlation Between Zhong Yang and CleanSpark

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

By analyzing existing cross correlation between Zhong Yang Financial and CleanSpark, you can compare the effects of market volatilities on Zhong Yang and CleanSpark 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 Zhong Yang with a short position of CleanSpark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhong Yang and CleanSpark.

Diversification Opportunities for Zhong Yang and CleanSpark

-0.36

Correlation Coefficient

Zhong Yang  CleanSpark

Very good diversification

The 3 months correlation between Zhong and CleanSpark is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Zhong Yang Financial and CleanSpark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanSpark and Zhong Yang 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 Zhong Yang Financial are associated (or correlated) with CleanSpark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanSpark has no effect on the direction of Zhong Yang i.e., Zhong Yang and CleanSpark go up and down completely randomly.

Pair Corralation between Zhong Yang and CleanSpark

Considering the 90-day investment horizon Zhong Yang Financial is expected to under-perform the CleanSpark. But the stock apears to be less risky and, when comparing its historical volatility, Zhong Yang Financial is 2.43 times less risky than CleanSpark. The stock trades about -0.05 of its potential returns per unit of risk. The CleanSpark is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,056  in CleanSpark on October 6, 2024 and sell it today you would earn a total of  24.00  from holding CleanSpark or generate 2.27% return on investment over 90 days.

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

Zhong Yang Financial  vs.  CleanSpark

Zhong Yang Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zhong Yang Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

CleanSpark

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CleanSpark are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, CleanSpark disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zhong Yang and CleanSpark

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

The idea behind Zhong Yang Financial and CleanSpark 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .