Correlation Between Zhongrun Resources and Sichuan Furong
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By analyzing existing cross correlation between Zhongrun Resources Investment and Sichuan Furong Technology, you can compare the effects of market volatilities on Zhongrun Resources and Sichuan Furong 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 Sichuan Furong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongrun Resources and Sichuan Furong.
Diversification Opportunities for Zhongrun Resources and Sichuan Furong
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zhongrun and Sichuan is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Zhongrun Resources Investment and Sichuan Furong Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Furong Technology 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 Sichuan Furong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Furong Technology has no effect on the direction of Zhongrun Resources i.e., Zhongrun Resources and Sichuan Furong go up and down completely randomly.
Pair Corralation between Zhongrun Resources and Sichuan Furong
Assuming the 90 days trading horizon Zhongrun Resources is expected to generate 17.17 times less return on investment than Sichuan Furong. But when comparing it to its historical volatility, Zhongrun Resources Investment is 11.31 times less risky than Sichuan Furong. It trades about 0.03 of its potential returns per unit of risk. Sichuan Furong Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,202 in Sichuan Furong Technology on October 16, 2024 and sell it today you would lose (70.00) from holding Sichuan Furong Technology or give up 5.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Zhongrun Resources Investment vs. Sichuan Furong Technology
Performance |
| Timeline |
| Zhongrun Resources |
| Sichuan Furong Technology |
Zhongrun Resources and Sichuan Furong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongrun Resources and Sichuan Furong
The main advantage of trading using opposite Zhongrun Resources and Sichuan Furong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongrun Resources position performs unexpectedly, Sichuan Furong 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 Sichuan Furong will offset losses from the drop in Sichuan Furong's long position.The idea behind Zhongrun Resources Investment and Sichuan Furong Technology 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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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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