Correlation Between Dalian Thermal and Zangge Holding
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By analyzing existing cross correlation between Dalian Thermal Power and Zangge Holding Co, you can compare the effects of market volatilities on Dalian Thermal and Zangge Holding 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 Dalian Thermal with a short position of Zangge Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalian Thermal and Zangge Holding.
Diversification Opportunities for Dalian Thermal and Zangge Holding
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dalian and Zangge is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Dalian Thermal Power and Zangge Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zangge Holding and Dalian Thermal 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 Dalian Thermal Power are associated (or correlated) with Zangge Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zangge Holding has no effect on the direction of Dalian Thermal i.e., Dalian Thermal and Zangge Holding go up and down completely randomly.
Pair Corralation between Dalian Thermal and Zangge Holding
Assuming the 90 days trading horizon Dalian Thermal Power is expected to generate 1.95 times more return on investment than Zangge Holding. However, Dalian Thermal is 1.95 times more volatile than Zangge Holding Co. It trades about 0.04 of its potential returns per unit of risk. Zangge Holding Co is currently generating about 0.03 per unit of risk. If you would invest 521.00 in Dalian Thermal Power on September 26, 2024 and sell it today you would earn a total of 216.00 from holding Dalian Thermal Power or generate 41.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dalian Thermal Power vs. Zangge Holding Co
Performance |
| Timeline |
| Dalian Thermal Power |
| Zangge Holding |
Dalian Thermal and Zangge Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dalian Thermal and Zangge Holding
The main advantage of trading using opposite Dalian Thermal and Zangge Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalian Thermal position performs unexpectedly, Zangge Holding 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 Zangge Holding will offset losses from the drop in Zangge Holding's long position.| Dalian Thermal vs. Industrial and Commercial | Dalian Thermal vs. Agricultural Bank of | Dalian Thermal vs. China Construction Bank | Dalian Thermal vs. Bank of China |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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