Correlation Between Beijing Sanyuan and Zhengzhou Coal
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By analyzing existing cross correlation between Beijing Sanyuan Foods and Zhengzhou Coal Mining, you can compare the effects of market volatilities on Beijing Sanyuan 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 Beijing Sanyuan with a short position of Zhengzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Sanyuan and Zhengzhou Coal.
Diversification Opportunities for Beijing Sanyuan and Zhengzhou Coal
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Beijing and Zhengzhou is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Sanyuan Foods 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 Beijing Sanyuan 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 Beijing Sanyuan Foods 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 Beijing Sanyuan i.e., Beijing Sanyuan and Zhengzhou Coal go up and down completely randomly.
Pair Corralation between Beijing Sanyuan and Zhengzhou Coal
Assuming the 90 days trading horizon Beijing Sanyuan Foods is expected to generate 0.78 times more return on investment than Zhengzhou Coal. However, Beijing Sanyuan Foods is 1.29 times less risky than Zhengzhou Coal. It trades about 0.02 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 408.00 in Beijing Sanyuan Foods on August 25, 2024 and sell it today you would earn a total of 13.00 from holding Beijing Sanyuan Foods or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Sanyuan Foods vs. Zhengzhou Coal Mining
Performance |
| Timeline |
| Beijing Sanyuan Foods |
| Zhengzhou Coal Mining |
Beijing Sanyuan and Zhengzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Sanyuan and Zhengzhou Coal
The main advantage of trading using opposite Beijing Sanyuan and Zhengzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Sanyuan 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.| Beijing Sanyuan vs. China Petroleum Chemical | Beijing Sanyuan vs. PetroChina Co Ltd | Beijing Sanyuan vs. China State Construction | Beijing Sanyuan vs. China Railway Group |
| Zhengzhou Coal vs. Sichuan Yahua Industrial | Zhengzhou Coal vs. Zhongyin Babi Food | Zhengzhou Coal vs. Beijing Sanyuan Foods | Zhengzhou Coal vs. Youyou Foods 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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