Correlation Between Sichuan Fulin and Zhongrun Resources
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By analyzing existing cross correlation between Sichuan Fulin Transportation and Zhongrun Resources Investment, you can compare the effects of market volatilities on Sichuan Fulin and Zhongrun Resources 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 Sichuan Fulin with a short position of Zhongrun Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Fulin and Zhongrun Resources.
Diversification Opportunities for Sichuan Fulin and Zhongrun Resources
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sichuan and Zhongrun is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Fulin Transportation and Zhongrun Resources Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongrun Resources and Sichuan Fulin 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 Sichuan Fulin Transportation are associated (or correlated) with Zhongrun Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongrun Resources has no effect on the direction of Sichuan Fulin i.e., Sichuan Fulin and Zhongrun Resources go up and down completely randomly.
Pair Corralation between Sichuan Fulin and Zhongrun Resources
Assuming the 90 days trading horizon Sichuan Fulin Transportation is expected to under-perform the Zhongrun Resources. But the stock apears to be less risky and, when comparing its historical volatility, Sichuan Fulin Transportation is 1.32 times less risky than Zhongrun Resources. The stock trades about -0.26 of its potential returns per unit of risk. The Zhongrun Resources Investment is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 312.00 in Zhongrun Resources Investment on October 16, 2024 and sell it today you would earn a total of 93.00 from holding Zhongrun Resources Investment or generate 29.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sichuan Fulin Transportation vs. Zhongrun Resources Investment
Performance |
Timeline |
Sichuan Fulin Transp |
Zhongrun Resources |
Sichuan Fulin and Zhongrun Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sichuan Fulin and Zhongrun Resources
The main advantage of trading using opposite Sichuan Fulin and Zhongrun Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Fulin position performs unexpectedly, Zhongrun Resources 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 Zhongrun Resources will offset losses from the drop in Zhongrun Resources' long position.Sichuan Fulin vs. Harvest Fund Management | Sichuan Fulin vs. Jiahe Foods Industry | Sichuan Fulin vs. Shanghai Ziyan Foods | Sichuan Fulin vs. Jahen Household Products |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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