Correlation Between Shanghai Material and Zhongrun Resources
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By analyzing existing cross correlation between Shanghai Material Trading and Zhongrun Resources Investment, you can compare the effects of market volatilities on Shanghai Material 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 Shanghai Material with a short position of Zhongrun Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Material and Zhongrun Resources.
Diversification Opportunities for Shanghai Material and Zhongrun Resources
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Zhongrun is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Material Trading and Zhongrun Resources Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongrun Resources and Shanghai Material 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 Shanghai Material Trading 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 Shanghai Material i.e., Shanghai Material and Zhongrun Resources go up and down completely randomly.
Pair Corralation between Shanghai Material and Zhongrun Resources
Assuming the 90 days trading horizon Shanghai Material is expected to generate 1.09 times less return on investment than Zhongrun Resources. In addition to that, Shanghai Material is 1.08 times more volatile than Zhongrun Resources Investment. It trades about 0.23 of its total potential returns per unit of risk. Zhongrun Resources Investment is currently generating about 0.28 per unit of volatility. If you would invest 273.00 in Zhongrun Resources Investment on September 1, 2024 and sell it today you would earn a total of 80.00 from holding Zhongrun Resources Investment or generate 29.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Material Trading vs. Zhongrun Resources Investment
Performance |
| Timeline |
| Shanghai Material Trading |
| Zhongrun Resources |
Shanghai Material and Zhongrun Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Material and Zhongrun Resources
The main advantage of trading using opposite Shanghai Material and Zhongrun Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Material 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.| Shanghai Material vs. Ming Yang Smart | Shanghai Material vs. 159681 | Shanghai Material vs. 159005 | Shanghai Material vs. Loctek Ergonomic Technology |
| Zhongrun Resources vs. BeiGene | Zhongrun Resources vs. Kweichow Moutai Co | Zhongrun Resources vs. Beijing Roborock Technology | Zhongrun Resources vs. G bits Network Technology |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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