Correlation Between Pengxin International and Dr Peng
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By analyzing existing cross correlation between Pengxin International Mining and Dr Peng Telecom, you can compare the effects of market volatilities on Pengxin International and Dr Peng 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 Dr Peng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pengxin International and Dr Peng.
Diversification Opportunities for Pengxin International and Dr Peng
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pengxin and 600804 is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Pengxin International Mining and Dr Peng Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dr Peng Telecom 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 Dr Peng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dr Peng Telecom has no effect on the direction of Pengxin International i.e., Pengxin International and Dr Peng go up and down completely randomly.
Pair Corralation between Pengxin International and Dr Peng
Assuming the 90 days trading horizon Pengxin International Mining is expected to generate 0.86 times more return on investment than Dr Peng. However, Pengxin International Mining is 1.16 times less risky than Dr Peng. It trades about 0.01 of its potential returns per unit of risk. Dr Peng Telecom is currently generating about -0.02 per unit of risk. If you would invest 325.00 in Pengxin International Mining on October 16, 2024 and sell it today you would lose (26.00) from holding Pengxin International Mining or give up 8.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pengxin International Mining vs. Dr Peng Telecom
Performance |
| Timeline |
| Pengxin International |
| Dr Peng Telecom |
Pengxin International and Dr Peng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pengxin International and Dr Peng
The main advantage of trading using opposite Pengxin International and Dr Peng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pengxin International position performs unexpectedly, Dr Peng 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 Dr Peng will offset losses from the drop in Dr Peng's long position.The idea behind Pengxin International Mining and Dr Peng Telecom 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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