Correlation Between Shenzhen Zhongzhuang and Guocheng Mining
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By analyzing existing cross correlation between Shenzhen Zhongzhuang Construction and Guocheng Mining Co, you can compare the effects of market volatilities on Shenzhen Zhongzhuang and Guocheng Mining 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 Shenzhen Zhongzhuang with a short position of Guocheng Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Zhongzhuang and Guocheng Mining.
Diversification Opportunities for Shenzhen Zhongzhuang and Guocheng Mining
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Guocheng is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Zhongzhuang Construct and Guocheng Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guocheng Mining and Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang Construction are associated (or correlated) with Guocheng Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guocheng Mining has no effect on the direction of Shenzhen Zhongzhuang i.e., Shenzhen Zhongzhuang and Guocheng Mining go up and down completely randomly.
Pair Corralation between Shenzhen Zhongzhuang and Guocheng Mining
Assuming the 90 days trading horizon Shenzhen Zhongzhuang Construction is expected to generate 0.82 times more return on investment than Guocheng Mining. However, Shenzhen Zhongzhuang Construction is 1.22 times less risky than Guocheng Mining. It trades about -0.44 of its potential returns per unit of risk. Guocheng Mining Co is currently generating about -0.36 per unit of risk. If you would invest 435.00 in Shenzhen Zhongzhuang Construction on October 14, 2024 and sell it today you would lose (113.00) from holding Shenzhen Zhongzhuang Construction or give up 25.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Zhongzhuang Construct vs. Guocheng Mining Co
Performance |
| Timeline |
| Shenzhen Zhongzhuang |
| Guocheng Mining |
Shenzhen Zhongzhuang and Guocheng Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Zhongzhuang and Guocheng Mining
The main advantage of trading using opposite Shenzhen Zhongzhuang and Guocheng Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Zhongzhuang position performs unexpectedly, Guocheng Mining 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 Guocheng Mining will offset losses from the drop in Guocheng Mining's long position.| Shenzhen Zhongzhuang vs. Tibet Huayu Mining | Shenzhen Zhongzhuang vs. Wuhan Yangtze Communication | Shenzhen Zhongzhuang vs. Sunwave Communications Co | Shenzhen Zhongzhuang vs. Suzhou Industrial Park |
| Guocheng Mining vs. Anhui Shiny Electronic | Guocheng Mining vs. YiDong Electronics Technology | Guocheng Mining vs. Shenzhen Zhongzhuang Construction | Guocheng Mining vs. Xinya Electronic Co |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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