Correlation Between Dalian Thermal and Zhongrun Resources
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By analyzing existing cross correlation between Dalian Thermal Power and Zhongrun Resources Investment, you can compare the effects of market volatilities on Dalian Thermal and Zhongrun Resources 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 Zhongrun Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalian Thermal and Zhongrun Resources.
Diversification Opportunities for Dalian Thermal and Zhongrun Resources
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dalian and Zhongrun is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Dalian Thermal Power and Zhongrun Resources Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongrun Resources 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 Zhongrun Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongrun Resources has no effect on the direction of Dalian Thermal i.e., Dalian Thermal and Zhongrun Resources go up and down completely randomly.
Pair Corralation between Dalian Thermal and Zhongrun Resources
Assuming the 90 days trading horizon Dalian Thermal Power is expected to generate 0.87 times more return on investment than Zhongrun Resources. However, Dalian Thermal Power is 1.15 times less risky than Zhongrun Resources. It trades about 0.02 of its potential returns per unit of risk. Zhongrun Resources Investment is currently generating about -0.28 per unit of risk. If you would invest 827.00 in Dalian Thermal Power on September 13, 2024 and sell it today you would earn a total of 4.00 from holding Dalian Thermal Power or generate 0.48% 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. Zhongrun Resources Investment
Performance |
| Timeline |
| Dalian Thermal Power |
| Zhongrun Resources |
Dalian Thermal and Zhongrun Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dalian Thermal and Zhongrun Resources
The main advantage of trading using opposite Dalian Thermal and Zhongrun Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalian Thermal position performs unexpectedly, Zhongrun Resources 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 Zhongrun Resources will offset losses from the drop in Zhongrun Resources' long position.| Dalian Thermal vs. Jinhe Biotechnology Co | Dalian Thermal vs. Jiujiang Shanshui Technology | Dalian Thermal vs. Northking Information Technology | Dalian Thermal vs. Jiangxi JDL Environmental |
| Zhongrun Resources vs. China Life Insurance | Zhongrun Resources vs. Cinda Securities Co | Zhongrun Resources vs. Piotech Inc A | Zhongrun Resources vs. Dongxing Sec 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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