Correlation Between Zhengzhou Coal and Shenzhen Kexin
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By analyzing existing cross correlation between Zhengzhou Coal Mining and Shenzhen Kexin Communication, you can compare the effects of market volatilities on Zhengzhou Coal and Shenzhen Kexin 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 Shenzhen Kexin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhengzhou Coal and Shenzhen Kexin.
Diversification Opportunities for Zhengzhou Coal and Shenzhen Kexin
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zhengzhou and Shenzhen is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Zhengzhou Coal Mining and Shenzhen Kexin Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Kexin Commu 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 Shenzhen Kexin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Kexin Commu has no effect on the direction of Zhengzhou Coal i.e., Zhengzhou Coal and Shenzhen Kexin go up and down completely randomly.
Pair Corralation between Zhengzhou Coal and Shenzhen Kexin
Assuming the 90 days trading horizon Zhengzhou Coal is expected to generate 1.22 times less return on investment than Shenzhen Kexin. But when comparing it to its historical volatility, Zhengzhou Coal Mining is 1.99 times less risky than Shenzhen Kexin. It trades about 0.12 of its potential returns per unit of risk. Shenzhen Kexin Communication is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,028 in Shenzhen Kexin Communication on October 18, 2024 and sell it today you would earn a total of 196.00 from holding Shenzhen Kexin Communication or generate 19.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhengzhou Coal Mining vs. Shenzhen Kexin Communication
Performance |
| Timeline |
| Zhengzhou Coal Mining |
| Shenzhen Kexin Commu |
Zhengzhou Coal and Shenzhen Kexin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhengzhou Coal and Shenzhen Kexin
The main advantage of trading using opposite Zhengzhou Coal and Shenzhen Kexin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhengzhou Coal position performs unexpectedly, Shenzhen Kexin 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 Shenzhen Kexin will offset losses from the drop in Shenzhen Kexin's long position.| Zhengzhou Coal vs. Miracll Chemicals Co | Zhengzhou Coal vs. Dymatic Chemicals | Zhengzhou Coal vs. Shenzhen Noposion Agrochemicals | Zhengzhou Coal vs. Yingde Greatchem Chemicals |
| Shenzhen Kexin vs. Zhengzhou Coal Mining | Shenzhen Kexin vs. Kidswant Children Products | Shenzhen Kexin vs. Hainan Mining Co | Shenzhen Kexin vs. Shenzhen Zhongzhuang 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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