Correlation Between Aba Chemicals and Zhongrun Resources
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By analyzing existing cross correlation between Aba Chemicals Corp and Zhongrun Resources Investment, you can compare the effects of market volatilities on Aba Chemicals 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 Aba Chemicals with a short position of Zhongrun Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Zhongrun Resources.
Diversification Opportunities for Aba Chemicals and Zhongrun Resources
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aba and Zhongrun is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp and Zhongrun Resources Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongrun Resources and Aba Chemicals 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 Aba Chemicals Corp 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 Aba Chemicals i.e., Aba Chemicals and Zhongrun Resources go up and down completely randomly.
Pair Corralation between Aba Chemicals and Zhongrun Resources
Assuming the 90 days trading horizon Aba Chemicals is expected to generate 3.27 times less return on investment than Zhongrun Resources. But when comparing it to its historical volatility, Aba Chemicals Corp is 1.37 times less risky than Zhongrun Resources. It trades about 0.15 of its potential returns per unit of risk. Zhongrun Resources Investment is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 415.00 in Zhongrun Resources Investment on November 18, 2024 and sell it today you would earn a total of 76.00 from holding Zhongrun Resources Investment or generate 18.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aba Chemicals Corp vs. Zhongrun Resources Investment
Performance |
| Timeline |
| Aba Chemicals Corp |
| Zhongrun Resources |
Aba Chemicals and Zhongrun Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aba Chemicals and Zhongrun Resources
The main advantage of trading using opposite Aba Chemicals and Zhongrun Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals 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.| Aba Chemicals vs. Hengdian Entertainment Co | Aba Chemicals vs. Jiahe Foods Industry | Aba Chemicals vs. Zhongyin Babi Food | Aba Chemicals vs. Zhejiang Daily Media |
| Zhongrun Resources vs. Luyin Investment Group | Zhongrun Resources vs. Hubei Geoway Investment | Zhongrun Resources vs. Northern United Publishing | Zhongrun Resources vs. Huawen Media Investment |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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