Correlation Between Zhongrun Resources and Beijing Wandong
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By analyzing existing cross correlation between Zhongrun Resources Investment and Beijing Wandong Medical, you can compare the effects of market volatilities on Zhongrun Resources and Beijing Wandong 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 Zhongrun Resources with a short position of Beijing Wandong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongrun Resources and Beijing Wandong.
Diversification Opportunities for Zhongrun Resources and Beijing Wandong
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zhongrun and Beijing is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Zhongrun Resources Investment and Beijing Wandong Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Wandong Medical and Zhongrun Resources 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 Zhongrun Resources Investment are associated (or correlated) with Beijing Wandong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Wandong Medical has no effect on the direction of Zhongrun Resources i.e., Zhongrun Resources and Beijing Wandong go up and down completely randomly.
Pair Corralation between Zhongrun Resources and Beijing Wandong
Assuming the 90 days trading horizon Zhongrun Resources Investment is expected to generate 3.57 times more return on investment than Beijing Wandong. However, Zhongrun Resources is 3.57 times more volatile than Beijing Wandong Medical. It trades about 0.3 of its potential returns per unit of risk. Beijing Wandong Medical is currently generating about -0.83 per unit of risk. If you would invest 312.00 in Zhongrun Resources Investment on October 15, 2024 and sell it today you would earn a total of 77.00 from holding Zhongrun Resources Investment or generate 24.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongrun Resources Investment vs. Beijing Wandong Medical
Performance |
| Timeline |
| Zhongrun Resources |
| Beijing Wandong Medical |
Zhongrun Resources and Beijing Wandong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongrun Resources and Beijing Wandong
The main advantage of trading using opposite Zhongrun Resources and Beijing Wandong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongrun Resources position performs unexpectedly, Beijing Wandong 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 Beijing Wandong will offset losses from the drop in Beijing Wandong's long position.The idea behind Zhongrun Resources Investment and Beijing Wandong Medical 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.
| Beijing Wandong vs. Chengdu Xingrong Investment | Beijing Wandong vs. Zhejiang Construction Investment | Beijing Wandong vs. Jiangsu Yueda Investment | Beijing Wandong vs. Zhongrun Resources 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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