Correlation Between Zhengzhou Coal and Chongqing Brewery
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By analyzing existing cross correlation between Zhengzhou Coal Mining and Chongqing Brewery Co, you can compare the effects of market volatilities on Zhengzhou Coal and Chongqing Brewery 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 Chongqing Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhengzhou Coal and Chongqing Brewery.
Diversification Opportunities for Zhengzhou Coal and Chongqing Brewery
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Zhengzhou and Chongqing is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Zhengzhou Coal Mining and Chongqing Brewery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Brewery 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 Chongqing Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Brewery has no effect on the direction of Zhengzhou Coal i.e., Zhengzhou Coal and Chongqing Brewery go up and down completely randomly.
Pair Corralation between Zhengzhou Coal and Chongqing Brewery
Assuming the 90 days trading horizon Zhengzhou Coal Mining is expected to generate 0.94 times more return on investment than Chongqing Brewery. However, Zhengzhou Coal Mining is 1.07 times less risky than Chongqing Brewery. It trades about 0.15 of its potential returns per unit of risk. Chongqing Brewery Co is currently generating about -0.38 per unit of risk. If you would invest 1,267 in Zhengzhou Coal Mining on November 4, 2024 and sell it today you would earn a total of 51.00 from holding Zhengzhou Coal Mining or generate 4.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhengzhou Coal Mining vs. Chongqing Brewery Co
Performance |
| Timeline |
| Zhengzhou Coal Mining |
| Chongqing Brewery |
Zhengzhou Coal and Chongqing Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhengzhou Coal and Chongqing Brewery
The main advantage of trading using opposite Zhengzhou Coal and Chongqing Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhengzhou Coal position performs unexpectedly, Chongqing Brewery 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 Chongqing Brewery will offset losses from the drop in Chongqing Brewery's long position.| Zhengzhou Coal vs. Vats Liquor Chain | Zhengzhou Coal vs. Beijing Yanjing Brewery | Zhengzhou Coal vs. China Asset Management | Zhengzhou Coal vs. Chengdu Spaceon Electronics |
| Chongqing Brewery vs. Qtone Education Group | Chongqing Brewery vs. Jinhui Mining Co | Chongqing Brewery vs. Guangdong Silvere Sci | Chongqing Brewery vs. Jiangxi Naipu Mining |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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