Correlation Between Shengda Mining and Zhengzhou Coal
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By analyzing existing cross correlation between Shengda Mining Co and Zhengzhou Coal Mining, you can compare the effects of market volatilities on Shengda Mining and Zhengzhou Coal 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 Shengda Mining with a short position of Zhengzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shengda Mining and Zhengzhou Coal.
Diversification Opportunities for Shengda Mining and Zhengzhou Coal
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shengda and Zhengzhou is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Shengda Mining Co and Zhengzhou Coal Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhengzhou Coal Mining and Shengda Mining 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 Shengda Mining Co are associated (or correlated) with Zhengzhou Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhengzhou Coal Mining has no effect on the direction of Shengda Mining i.e., Shengda Mining and Zhengzhou Coal go up and down completely randomly.
Pair Corralation between Shengda Mining and Zhengzhou Coal
Assuming the 90 days trading horizon Shengda Mining Co is expected to under-perform the Zhengzhou Coal. In addition to that, Shengda Mining is 2.39 times more volatile than Zhengzhou Coal Mining. It trades about -0.03 of its total potential returns per unit of risk. Zhengzhou Coal Mining is currently generating about -0.01 per unit of volatility. If you would invest 1,294 in Zhengzhou Coal Mining on August 24, 2024 and sell it today you would lose (6.00) from holding Zhengzhou Coal Mining or give up 0.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shengda Mining Co vs. Zhengzhou Coal Mining
Performance |
| Timeline |
| Shengda Mining |
| Zhengzhou Coal Mining |
Shengda Mining and Zhengzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shengda Mining and Zhengzhou Coal
The main advantage of trading using opposite Shengda Mining and Zhengzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shengda Mining position performs unexpectedly, Zhengzhou Coal 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 Zhengzhou Coal will offset losses from the drop in Zhengzhou Coal's long position.| Shengda Mining vs. Zijin Mining Group | Shengda Mining vs. Wanhua Chemical Group | Shengda Mining vs. Baoshan Iron Steel | Shengda Mining vs. Shandong Gold Mining |
| Zhengzhou Coal vs. Guangzhou Seagull Kitchen | Zhengzhou Coal vs. Allwin Telecommunication Co | Zhengzhou Coal vs. Caihong Display Devices | Zhengzhou Coal vs. Marssenger Kitchenware Co |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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