Correlation Between Zhengzhou Coal and Guangdong Qunxing
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By analyzing existing cross correlation between Zhengzhou Coal Mining and Guangdong Qunxing Toys, you can compare the effects of market volatilities on Zhengzhou Coal and Guangdong Qunxing 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 Guangdong Qunxing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhengzhou Coal and Guangdong Qunxing.
Diversification Opportunities for Zhengzhou Coal and Guangdong Qunxing
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zhengzhou and Guangdong is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Zhengzhou Coal Mining and Guangdong Qunxing Toys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Qunxing Toys 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 Guangdong Qunxing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Qunxing Toys has no effect on the direction of Zhengzhou Coal i.e., Zhengzhou Coal and Guangdong Qunxing go up and down completely randomly.
Pair Corralation between Zhengzhou Coal and Guangdong Qunxing
Assuming the 90 days trading horizon Zhengzhou Coal Mining is expected to under-perform the Guangdong Qunxing. But the stock apears to be less risky and, when comparing its historical volatility, Zhengzhou Coal Mining is 1.76 times less risky than Guangdong Qunxing. The stock trades about -0.01 of its potential returns per unit of risk. The Guangdong Qunxing Toys is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 563.00 in Guangdong Qunxing Toys on October 22, 2024 and sell it today you would earn a total of 109.00 from holding Guangdong Qunxing Toys or generate 19.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhengzhou Coal Mining vs. Guangdong Qunxing Toys
Performance |
| Timeline |
| Zhengzhou Coal Mining |
| Guangdong Qunxing Toys |
Zhengzhou Coal and Guangdong Qunxing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhengzhou Coal and Guangdong Qunxing
The main advantage of trading using opposite Zhengzhou Coal and Guangdong Qunxing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhengzhou Coal position performs unexpectedly, Guangdong Qunxing 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 Guangdong Qunxing will offset losses from the drop in Guangdong Qunxing's long position.| Zhengzhou Coal vs. Thunder Software Technology | Zhengzhou Coal vs. Jiangsu Hoperun Software | Zhengzhou Coal vs. GuoChuang Software Co | Zhengzhou Coal vs. Shanghai Newtouch Software |
| Guangdong Qunxing vs. Weihai Honglin Electronic | Guangdong Qunxing vs. Xizi Clean Energy | Guangdong Qunxing vs. Fuzhou Rockchip Electronics | Guangdong Qunxing vs. Guangzhou Restaurants Group |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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