Correlation Between Pengxin International and China Union
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By analyzing existing cross correlation between Pengxin International Mining and China Union Holdings, you can compare the effects of market volatilities on Pengxin International and China Union 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 Pengxin International with a short position of China Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pengxin International and China Union.
Diversification Opportunities for Pengxin International and China Union
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pengxin and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pengxin International Mining and China Union Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Union Holdings and Pengxin International 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 Pengxin International Mining are associated (or correlated) with China Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Union Holdings has no effect on the direction of Pengxin International i.e., Pengxin International and China Union go up and down completely randomly.
Pair Corralation between Pengxin International and China Union
Assuming the 90 days trading horizon Pengxin International Mining is expected to under-perform the China Union. In addition to that, Pengxin International is 1.3 times more volatile than China Union Holdings. It trades about -0.19 of its total potential returns per unit of risk. China Union Holdings is currently generating about -0.05 per unit of volatility. If you would invest 416.00 in China Union Holdings on October 28, 2024 and sell it today you would lose (16.00) from holding China Union Holdings or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pengxin International Mining vs. China Union Holdings
Performance |
| Timeline |
| Pengxin International |
| China Union Holdings |
Pengxin International and China Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pengxin International and China Union
The main advantage of trading using opposite Pengxin International and China Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pengxin International position performs unexpectedly, China Union 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 China Union will offset losses from the drop in China Union's long position.The idea behind Pengxin International Mining and China Union Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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