Correlation Between Zhengzhou Coal and New China
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By analyzing existing cross correlation between Zhengzhou Coal Mining and New China Life, you can compare the effects of market volatilities on Zhengzhou Coal and New China 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 New China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhengzhou Coal and New China.
Diversification Opportunities for Zhengzhou Coal and New China
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Zhengzhou and New is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Zhengzhou Coal Mining and New China Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New China Life 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 New China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New China Life has no effect on the direction of Zhengzhou Coal i.e., Zhengzhou Coal and New China go up and down completely randomly.
Pair Corralation between Zhengzhou Coal and New China
Assuming the 90 days trading horizon Zhengzhou Coal is expected to generate 4.12 times less return on investment than New China. But when comparing it to its historical volatility, Zhengzhou Coal Mining is 1.47 times less risky than New China. It trades about 0.07 of its potential returns per unit of risk. New China Life is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,316 in New China Life on September 2, 2024 and sell it today you would earn a total of 1,420 from holding New China Life or generate 42.82% 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. New China Life
Performance |
| Timeline |
| Zhengzhou Coal Mining |
| New China Life |
Zhengzhou Coal and New China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhengzhou Coal and New China
The main advantage of trading using opposite Zhengzhou Coal and New China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhengzhou Coal position performs unexpectedly, New China 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 New China will offset losses from the drop in New China's long position.| Zhengzhou Coal vs. Kweichow Moutai Co | Zhengzhou Coal vs. NAURA Technology Group | Zhengzhou Coal vs. Zhejiang Orient Gene | Zhengzhou Coal vs. APT Medical |
| New China vs. Xinjiang Communications Construction | New China vs. JCHX Mining Management | New China vs. Chengtun Mining Group | New China vs. Pengxin International 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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