Correlation Between Zhengzhou Coal and Dongfeng Automobile
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By analyzing existing cross correlation between Zhengzhou Coal Mining and Dongfeng Automobile Co, you can compare the effects of market volatilities on Zhengzhou Coal and Dongfeng Automobile 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 Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhengzhou Coal and Dongfeng Automobile.
Diversification Opportunities for Zhengzhou Coal and Dongfeng Automobile
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Zhengzhou and Dongfeng is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Zhengzhou Coal Mining and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile 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 Dongfeng Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongfeng Automobile has no effect on the direction of Zhengzhou Coal i.e., Zhengzhou Coal and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Zhengzhou Coal and Dongfeng Automobile
Assuming the 90 days trading horizon Zhengzhou Coal Mining is expected to under-perform the Dongfeng Automobile. But the stock apears to be less risky and, when comparing its historical volatility, Zhengzhou Coal Mining is 2.52 times less risky than Dongfeng Automobile. The stock trades about -0.06 of its potential returns per unit of risk. The Dongfeng Automobile Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 729.00 in Dongfeng Automobile Co on October 25, 2024 and sell it today you would lose (8.00) from holding Dongfeng Automobile Co or give up 1.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhengzhou Coal Mining vs. Dongfeng Automobile Co
Performance |
| Timeline |
| Zhengzhou Coal Mining |
| Dongfeng Automobile |
Zhengzhou Coal and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhengzhou Coal and Dongfeng Automobile
The main advantage of trading using opposite Zhengzhou Coal and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhengzhou Coal position performs unexpectedly, Dongfeng Automobile 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 Dongfeng Automobile will offset losses from the drop in Dongfeng Automobile's long position.| Zhengzhou Coal vs. Kweichow Moutai Co | Zhengzhou Coal vs. Contemporary Amperex Technology | Zhengzhou Coal vs. Beijing Roborock Technology | Zhengzhou Coal vs. BYD Co Ltd |
| Dongfeng Automobile vs. Touchstone International Medical | Dongfeng Automobile vs. Easyhome New Retail | Dongfeng Automobile vs. XinJiang GuoTong Pipeline | Dongfeng Automobile vs. Tinavi Medical Technologies |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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