Correlation Between Zhengzhou Coal and Hubei Xingfa
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By analyzing existing cross correlation between Zhengzhou Coal Mining and Hubei Xingfa Chemicals, you can compare the effects of market volatilities on Zhengzhou Coal and Hubei Xingfa 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 Hubei Xingfa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhengzhou Coal and Hubei Xingfa.
Diversification Opportunities for Zhengzhou Coal and Hubei Xingfa
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Zhengzhou and Hubei is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Zhengzhou Coal Mining and Hubei Xingfa Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Xingfa Chemicals 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 Hubei Xingfa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Xingfa Chemicals has no effect on the direction of Zhengzhou Coal i.e., Zhengzhou Coal and Hubei Xingfa go up and down completely randomly.
Pair Corralation between Zhengzhou Coal and Hubei Xingfa
Assuming the 90 days trading horizon Zhengzhou Coal Mining is expected to generate 1.24 times more return on investment than Hubei Xingfa. However, Zhengzhou Coal is 1.24 times more volatile than Hubei Xingfa Chemicals. It trades about 0.02 of its potential returns per unit of risk. Hubei Xingfa Chemicals is currently generating about -0.22 per unit of risk. If you would invest 1,300 in Zhengzhou Coal Mining on October 17, 2024 and sell it today you would earn a total of 7.00 from holding Zhengzhou Coal Mining or generate 0.54% 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. Hubei Xingfa Chemicals
Performance |
| Timeline |
| Zhengzhou Coal Mining |
| Hubei Xingfa Chemicals |
Zhengzhou Coal and Hubei Xingfa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhengzhou Coal and Hubei Xingfa
The main advantage of trading using opposite Zhengzhou Coal and Hubei Xingfa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhengzhou Coal position performs unexpectedly, Hubei Xingfa 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 Hubei Xingfa will offset losses from the drop in Hubei Xingfa'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 |
| Hubei Xingfa vs. Luyin Investment Group | Hubei Xingfa vs. Chengdu Xingrong Investment | Hubei Xingfa vs. Xiandai Investment Co | Hubei Xingfa vs. Fujian Longzhou Transportation |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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