Correlation Between Hubei Xingfa and Zhengzhou Coal
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By analyzing existing cross correlation between Hubei Xingfa Chemicals and Zhengzhou Coal Mining, you can compare the effects of market volatilities on Hubei Xingfa 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 Hubei Xingfa with a short position of Zhengzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Xingfa and Zhengzhou Coal.
Diversification Opportunities for Hubei Xingfa and Zhengzhou Coal
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hubei and Zhengzhou is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Xingfa Chemicals 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 Hubei Xingfa 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 Hubei Xingfa Chemicals 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 Hubei Xingfa i.e., Hubei Xingfa and Zhengzhou Coal go up and down completely randomly.
Pair Corralation between Hubei Xingfa and Zhengzhou Coal
Assuming the 90 days trading horizon Hubei Xingfa Chemicals is expected to under-perform the Zhengzhou Coal. But the stock apears to be less risky and, when comparing its historical volatility, Hubei Xingfa Chemicals is 1.24 times less risky than Zhengzhou Coal. The stock trades about -0.22 of its potential returns per unit of risk. The Zhengzhou Coal Mining is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,300 in Zhengzhou Coal Mining on October 17, 2024 and sell it today you would earn a total of 7.00 from holding Zhengzhou Coal Mining or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Xingfa Chemicals vs. Zhengzhou Coal Mining
Performance |
| Timeline |
| Hubei Xingfa Chemicals |
| Zhengzhou Coal Mining |
Hubei Xingfa and Zhengzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Xingfa and Zhengzhou Coal
The main advantage of trading using opposite Hubei Xingfa and Zhengzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Xingfa 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.| Hubei Xingfa vs. Luyin Investment Group | Hubei Xingfa vs. Chengdu Xingrong Investment | Hubei Xingfa vs. Xiandai Investment Co | Hubei Xingfa vs. Fujian Longzhou Transportation |
| Zhengzhou Coal vs. Miracll Chemicals Co | Zhengzhou Coal vs. Dymatic Chemicals | Zhengzhou Coal vs. Shenzhen Noposion Agrochemicals | Zhengzhou Coal vs. Yingde Greatchem Chemicals |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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