Correlation Between Guangzhou Haige and Zhengzhou Coal
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By analyzing existing cross correlation between Guangzhou Haige Communications and Zhengzhou Coal Mining, you can compare the effects of market volatilities on Guangzhou Haige 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 Guangzhou Haige with a short position of Zhengzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Haige and Zhengzhou Coal.
Diversification Opportunities for Guangzhou Haige and Zhengzhou Coal
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Zhengzhou is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Haige Communications 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 Guangzhou Haige 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 Guangzhou Haige Communications 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 Guangzhou Haige i.e., Guangzhou Haige and Zhengzhou Coal go up and down completely randomly.
Pair Corralation between Guangzhou Haige and Zhengzhou Coal
Assuming the 90 days trading horizon Guangzhou Haige Communications is expected to generate 1.29 times more return on investment than Zhengzhou Coal. However, Guangzhou Haige is 1.29 times more volatile than Zhengzhou Coal Mining. It trades about 0.05 of its potential returns per unit of risk. Zhengzhou Coal Mining is currently generating about 0.03 per unit of risk. If you would invest 791.00 in Guangzhou Haige Communications on September 14, 2024 and sell it today you would earn a total of 492.00 from holding Guangzhou Haige Communications or generate 62.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Haige Communications vs. Zhengzhou Coal Mining
Performance |
| Timeline |
| Guangzhou Haige Comm |
| Zhengzhou Coal Mining |
Guangzhou Haige and Zhengzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Haige and Zhengzhou Coal
The main advantage of trading using opposite Guangzhou Haige and Zhengzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Haige 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.| Guangzhou Haige vs. Changchun UP Optotech | Guangzhou Haige vs. Yunnan Copper Co | Guangzhou Haige vs. Kangping Technology Co | Guangzhou Haige vs. Peoples Insurance of |
| Zhengzhou Coal vs. Sanan Optoelectronics Co | Zhengzhou Coal vs. Tibet Huayu Mining | Zhengzhou Coal vs. Success Electronics | Zhengzhou Coal vs. Puyang Huicheng Electronic |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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