Correlation Between Zhengzhou Coal and Changjiang Jinggong
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By analyzing existing cross correlation between Zhengzhou Coal Mining and Changjiang Jinggong Steel, you can compare the effects of market volatilities on Zhengzhou Coal and Changjiang Jinggong 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 Changjiang Jinggong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhengzhou Coal and Changjiang Jinggong.
Diversification Opportunities for Zhengzhou Coal and Changjiang Jinggong
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Zhengzhou and Changjiang is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Zhengzhou Coal Mining and Changjiang Jinggong Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changjiang Jinggong Steel 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 Changjiang Jinggong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changjiang Jinggong Steel has no effect on the direction of Zhengzhou Coal i.e., Zhengzhou Coal and Changjiang Jinggong go up and down completely randomly.
Pair Corralation between Zhengzhou Coal and Changjiang Jinggong
Assuming the 90 days trading horizon Zhengzhou Coal Mining is expected to under-perform the Changjiang Jinggong. But the stock apears to be less risky and, when comparing its historical volatility, Zhengzhou Coal Mining is 1.19 times less risky than Changjiang Jinggong. The stock trades about -0.11 of its potential returns per unit of risk. The Changjiang Jinggong Steel is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 280.00 in Changjiang Jinggong Steel on August 25, 2024 and sell it today you would earn a total of 19.00 from holding Changjiang Jinggong Steel or generate 6.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhengzhou Coal Mining vs. Changjiang Jinggong Steel
Performance |
| Timeline |
| Zhengzhou Coal Mining |
| Changjiang Jinggong Steel |
Zhengzhou Coal and Changjiang Jinggong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhengzhou Coal and Changjiang Jinggong
The main advantage of trading using opposite Zhengzhou Coal and Changjiang Jinggong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhengzhou Coal position performs unexpectedly, Changjiang Jinggong 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 Changjiang Jinggong will offset losses from the drop in Changjiang Jinggong's long position.| Zhengzhou Coal vs. Sichuan Yahua Industrial | Zhengzhou Coal vs. Zhongyin Babi Food | Zhengzhou Coal vs. Beijing Sanyuan Foods | Zhengzhou Coal vs. Youyou Foods Co |
| Changjiang Jinggong vs. Yingde Greatchem Chemicals | Changjiang Jinggong vs. Haima Automobile Group | Changjiang Jinggong vs. Zhengzhou Coal Mining | Changjiang Jinggong vs. Hubei Xingfa Chemicals |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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