Correlation Between Zhengzhou Coal and Tianshan Aluminum
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By analyzing existing cross correlation between Zhengzhou Coal Mining and Tianshan Aluminum Group, you can compare the effects of market volatilities on Zhengzhou Coal and Tianshan Aluminum 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 Zhengzhou Coal with a short position of Tianshan Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhengzhou Coal and Tianshan Aluminum.
Diversification Opportunities for Zhengzhou Coal and Tianshan Aluminum
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Zhengzhou and Tianshan is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Zhengzhou Coal Mining and Tianshan Aluminum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianshan Aluminum and Zhengzhou Coal 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 Zhengzhou Coal Mining are associated (or correlated) with Tianshan Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianshan Aluminum has no effect on the direction of Zhengzhou Coal i.e., Zhengzhou Coal and Tianshan Aluminum go up and down completely randomly.
Pair Corralation between Zhengzhou Coal and Tianshan Aluminum
Assuming the 90 days trading horizon Zhengzhou Coal is expected to generate 2.48 times less return on investment than Tianshan Aluminum. But when comparing it to its historical volatility, Zhengzhou Coal Mining is 1.25 times less risky than Tianshan Aluminum. It trades about 0.06 of its potential returns per unit of risk. Tianshan Aluminum Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 660.00 in Tianshan Aluminum Group on August 28, 2024 and sell it today you would earn a total of 143.00 from holding Tianshan Aluminum Group or generate 21.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhengzhou Coal Mining vs. Tianshan Aluminum Group
Performance |
| Timeline |
| Zhengzhou Coal Mining |
| Tianshan Aluminum |
Zhengzhou Coal and Tianshan Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhengzhou Coal and Tianshan Aluminum
The main advantage of trading using opposite Zhengzhou Coal and Tianshan Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhengzhou Coal position performs unexpectedly, Tianshan Aluminum 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 Tianshan Aluminum will offset losses from the drop in Tianshan Aluminum's long position.| Zhengzhou Coal vs. Allwin Telecommunication Co | Zhengzhou Coal vs. Postal Savings Bank | Zhengzhou Coal vs. Guosheng Financial Holding | Zhengzhou Coal vs. Panda Financial Holding |
| Tianshan Aluminum vs. China Petroleum Chemical | Tianshan Aluminum vs. China State Construction | Tianshan Aluminum vs. China Railway Group | Tianshan Aluminum vs. China Railway Construction |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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