Correlation Between Beijing Yanjing and Zhengzhou Coal
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By analyzing existing cross correlation between Beijing Yanjing Brewery and Zhengzhou Coal Mining, you can compare the effects of market volatilities on Beijing Yanjing 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 Beijing Yanjing with a short position of Zhengzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Yanjing and Zhengzhou Coal.
Diversification Opportunities for Beijing Yanjing and Zhengzhou Coal
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Beijing and Zhengzhou is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Yanjing Brewery 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 Beijing Yanjing 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 Beijing Yanjing Brewery 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 Beijing Yanjing i.e., Beijing Yanjing and Zhengzhou Coal go up and down completely randomly.
Pair Corralation between Beijing Yanjing and Zhengzhou Coal
Assuming the 90 days trading horizon Beijing Yanjing Brewery is expected to generate 1.05 times more return on investment than Zhengzhou Coal. However, Beijing Yanjing is 1.05 times more volatile than Zhengzhou Coal Mining. It trades about 0.28 of its potential returns per unit of risk. Zhengzhou Coal Mining is currently generating about -0.08 per unit of risk. If you would invest 1,019 in Beijing Yanjing Brewery on September 15, 2024 and sell it today you would earn a total of 99.00 from holding Beijing Yanjing Brewery or generate 9.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Yanjing Brewery vs. Zhengzhou Coal Mining
Performance |
| Timeline |
| Beijing Yanjing Brewery |
| Zhengzhou Coal Mining |
Beijing Yanjing and Zhengzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Yanjing and Zhengzhou Coal
The main advantage of trading using opposite Beijing Yanjing and Zhengzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Yanjing 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.| Beijing Yanjing vs. Industrial and Commercial | Beijing Yanjing vs. Kweichow Moutai Co | Beijing Yanjing vs. Agricultural Bank of | Beijing Yanjing vs. China Mobile Limited |
| Zhengzhou Coal vs. Sanbo Hospital Management | Zhengzhou Coal vs. China National Software | Zhengzhou Coal vs. Beijing Yanjing Brewery | Zhengzhou Coal vs. Shanghai Rongtai Health |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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