Correlation Between Xinjiang Tianrun and Zhengzhou Coal
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By analyzing existing cross correlation between Xinjiang Tianrun Dairy and Zhengzhou Coal Mining, you can compare the effects of market volatilities on Xinjiang Tianrun 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 Xinjiang Tianrun with a short position of Zhengzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Tianrun and Zhengzhou Coal.
Diversification Opportunities for Xinjiang Tianrun and Zhengzhou Coal
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xinjiang and Zhengzhou is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Tianrun Dairy 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 Xinjiang Tianrun 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 Xinjiang Tianrun Dairy 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 Xinjiang Tianrun i.e., Xinjiang Tianrun and Zhengzhou Coal go up and down completely randomly.
Pair Corralation between Xinjiang Tianrun and Zhengzhou Coal
Assuming the 90 days trading horizon Xinjiang Tianrun Dairy is expected to under-perform the Zhengzhou Coal. In addition to that, Xinjiang Tianrun is 1.02 times more volatile than Zhengzhou Coal Mining. It trades about -0.04 of its total potential returns per unit of risk. Zhengzhou Coal Mining is currently generating about 0.03 per unit of volatility. If you would invest 1,126 in Zhengzhou Coal Mining on September 12, 2024 and sell it today you would earn a total of 181.00 from holding Zhengzhou Coal Mining or generate 16.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Tianrun Dairy vs. Zhengzhou Coal Mining
Performance |
| Timeline |
| Xinjiang Tianrun Dairy |
| Zhengzhou Coal Mining |
Xinjiang Tianrun and Zhengzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Tianrun and Zhengzhou Coal
The main advantage of trading using opposite Xinjiang Tianrun and Zhengzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Tianrun 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.| Xinjiang Tianrun vs. China Petroleum Chemical | Xinjiang Tianrun vs. PetroChina Co Ltd | Xinjiang Tianrun vs. China State Construction | Xinjiang Tianrun vs. China Railway Group |
| Zhengzhou Coal vs. Agricultural Bank of | Zhengzhou Coal vs. Industrial and Commercial | Zhengzhou Coal vs. Bank of China | Zhengzhou Coal vs. PetroChina Co Ltd |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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