Correlation Between Zhejiang Kingland and Shanxi Xishan
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By analyzing existing cross correlation between Zhejiang Kingland Pipeline and Shanxi Xishan Coal, you can compare the effects of market volatilities on Zhejiang Kingland and Shanxi Xishan 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 Zhejiang Kingland with a short position of Shanxi Xishan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Kingland and Shanxi Xishan.
Diversification Opportunities for Zhejiang Kingland and Shanxi Xishan
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Shanxi is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Kingland Pipeline and Shanxi Xishan Coal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanxi Xishan Coal and Zhejiang Kingland 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 Zhejiang Kingland Pipeline are associated (or correlated) with Shanxi Xishan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanxi Xishan Coal has no effect on the direction of Zhejiang Kingland i.e., Zhejiang Kingland and Shanxi Xishan go up and down completely randomly.
Pair Corralation between Zhejiang Kingland and Shanxi Xishan
Assuming the 90 days trading horizon Zhejiang Kingland Pipeline is expected to generate 0.98 times more return on investment than Shanxi Xishan. However, Zhejiang Kingland Pipeline is 1.02 times less risky than Shanxi Xishan. It trades about 0.01 of its potential returns per unit of risk. Shanxi Xishan Coal is currently generating about -0.01 per unit of risk. If you would invest 635.00 in Zhejiang Kingland Pipeline on August 29, 2024 and sell it today you would lose (21.00) from holding Zhejiang Kingland Pipeline or give up 3.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Kingland Pipeline vs. Shanxi Xishan Coal
Performance |
| Timeline |
| Zhejiang Kingland |
| Shanxi Xishan Coal |
Zhejiang Kingland and Shanxi Xishan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Kingland and Shanxi Xishan
The main advantage of trading using opposite Zhejiang Kingland and Shanxi Xishan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Kingland position performs unexpectedly, Shanxi Xishan 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 Shanxi Xishan will offset losses from the drop in Shanxi Xishan's long position.| Zhejiang Kingland vs. HaiXin Foods Co | Zhejiang Kingland vs. Juewei Food Co | Zhejiang Kingland vs. Gan Yuan Foods | Zhejiang Kingland vs. Great Sun Foods Co |
| Shanxi Xishan vs. Zhejiang Kingland Pipeline | Shanxi Xishan vs. Xiangyang Automobile Bearing | Shanxi Xishan vs. Suzhou Novoprotein Scientific | Shanxi Xishan vs. COL Digital Publishing |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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