Correlation Between Chengtun Mining and Linzhou Heavy
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By analyzing existing cross correlation between Chengtun Mining Group and Linzhou Heavy Machinery, you can compare the effects of market volatilities on Chengtun Mining and Linzhou Heavy 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 Chengtun Mining with a short position of Linzhou Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengtun Mining and Linzhou Heavy.
Diversification Opportunities for Chengtun Mining and Linzhou Heavy
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chengtun and Linzhou is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Chengtun Mining Group and Linzhou Heavy Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linzhou Heavy Machinery and Chengtun Mining 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 Chengtun Mining Group are associated (or correlated) with Linzhou Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linzhou Heavy Machinery has no effect on the direction of Chengtun Mining i.e., Chengtun Mining and Linzhou Heavy go up and down completely randomly.
Pair Corralation between Chengtun Mining and Linzhou Heavy
Assuming the 90 days trading horizon Chengtun Mining is expected to generate 3.86 times less return on investment than Linzhou Heavy. But when comparing it to its historical volatility, Chengtun Mining Group is 1.38 times less risky than Linzhou Heavy. It trades about 0.02 of its potential returns per unit of risk. Linzhou Heavy Machinery is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 305.00 in Linzhou Heavy Machinery on September 4, 2024 and sell it today you would earn a total of 137.00 from holding Linzhou Heavy Machinery or generate 44.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Chengtun Mining Group vs. Linzhou Heavy Machinery
Performance |
| Timeline |
| Chengtun Mining Group |
| Linzhou Heavy Machinery |
Chengtun Mining and Linzhou Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengtun Mining and Linzhou Heavy
The main advantage of trading using opposite Chengtun Mining and Linzhou Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengtun Mining position performs unexpectedly, Linzhou Heavy 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 Linzhou Heavy will offset losses from the drop in Linzhou Heavy's long position.| Chengtun Mining vs. Dezhan HealthCare Co | Chengtun Mining vs. Kuangda Technology Group | Chengtun Mining vs. Soyea Technology Co | Chengtun Mining vs. Shanghai Rongtai Health |
| Linzhou Heavy vs. Chengdu Kanghua Biological | Linzhou Heavy vs. Beijing Wantai Biological | Linzhou Heavy vs. Suzhou Novoprotein Scientific | Linzhou Heavy vs. Aluminum Corp of |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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