Correlation Between Sichuan Furong and Zhongrun Resources
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By analyzing existing cross correlation between Sichuan Furong Technology and Zhongrun Resources Investment, you can compare the effects of market volatilities on Sichuan Furong and Zhongrun Resources 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 Sichuan Furong with a short position of Zhongrun Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Furong and Zhongrun Resources.
Diversification Opportunities for Sichuan Furong and Zhongrun Resources
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sichuan and Zhongrun is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Furong Technology and Zhongrun Resources Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongrun Resources and Sichuan Furong 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 Sichuan Furong Technology are associated (or correlated) with Zhongrun Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongrun Resources has no effect on the direction of Sichuan Furong i.e., Sichuan Furong and Zhongrun Resources go up and down completely randomly.
Pair Corralation between Sichuan Furong and Zhongrun Resources
Assuming the 90 days trading horizon Sichuan Furong Technology is expected to generate 11.31 times more return on investment than Zhongrun Resources. However, Sichuan Furong is 11.31 times more volatile than Zhongrun Resources Investment. It trades about 0.04 of its potential returns per unit of risk. Zhongrun Resources Investment is currently generating about 0.03 per unit of risk. If you would invest 1,202 in Sichuan Furong Technology on October 16, 2024 and sell it today you would lose (70.00) from holding Sichuan Furong Technology or give up 5.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Sichuan Furong Technology vs. Zhongrun Resources Investment
Performance |
| Timeline |
| Sichuan Furong Technology |
| Zhongrun Resources |
Sichuan Furong and Zhongrun Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Furong and Zhongrun Resources
The main advantage of trading using opposite Sichuan Furong and Zhongrun Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Furong position performs unexpectedly, Zhongrun Resources 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 Zhongrun Resources will offset losses from the drop in Zhongrun Resources' long position.| Sichuan Furong vs. Allgens Medical Technology | Sichuan Furong vs. Kontour Medical Technology | Sichuan Furong vs. Jinhe Biotechnology Co | Sichuan Furong vs. Liaoning Chengda Biotechnology |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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