Correlation Between Shanxi Xishan and Zhejiang Kingland
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By analyzing existing cross correlation between Shanxi Xishan Coal and Zhejiang Kingland Pipeline, you can compare the effects of market volatilities on Shanxi Xishan and Zhejiang Kingland 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 Shanxi Xishan with a short position of Zhejiang Kingland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanxi Xishan and Zhejiang Kingland.
Diversification Opportunities for Shanxi Xishan and Zhejiang Kingland
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanxi and Zhejiang is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Shanxi Xishan Coal and Zhejiang Kingland Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Kingland and Shanxi Xishan 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 Shanxi Xishan Coal are associated (or correlated) with Zhejiang Kingland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Kingland has no effect on the direction of Shanxi Xishan i.e., Shanxi Xishan and Zhejiang Kingland go up and down completely randomly.
Pair Corralation between Shanxi Xishan and Zhejiang Kingland
Assuming the 90 days trading horizon Shanxi Xishan is expected to generate 3.56 times less return on investment than Zhejiang Kingland. In addition to that, Shanxi Xishan is 1.0 times more volatile than Zhejiang Kingland Pipeline. It trades about 0.04 of its total potential returns per unit of risk. Zhejiang Kingland Pipeline is currently generating about 0.13 per unit of volatility. If you would invest 516.00 in Zhejiang Kingland Pipeline on August 29, 2024 and sell it today you would earn a total of 98.00 from holding Zhejiang Kingland Pipeline or generate 18.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanxi Xishan Coal vs. Zhejiang Kingland Pipeline
Performance |
| Timeline |
| Shanxi Xishan Coal |
| Zhejiang Kingland |
Shanxi Xishan and Zhejiang Kingland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanxi Xishan and Zhejiang Kingland
The main advantage of trading using opposite Shanxi Xishan and Zhejiang Kingland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanxi Xishan position performs unexpectedly, Zhejiang Kingland 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 Zhejiang Kingland will offset losses from the drop in Zhejiang Kingland's long position.| Shanxi Xishan vs. Shanghai Construction Group | Shanxi Xishan vs. Harvest Fund Management | Shanxi Xishan vs. Qijing Machinery | Shanxi Xishan vs. AVIC Fund Management |
| Zhejiang Kingland vs. Chongqing Shunbo Aluminum | Zhejiang Kingland vs. Shenzhen Topway Video | Zhejiang Kingland vs. Hefei Metalforming Mach | Zhejiang Kingland vs. Rising Nonferrous Metals |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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