Correlation Between Zhongrun Resources and Guangdong Xiongsu
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By analyzing existing cross correlation between Zhongrun Resources Investment and Guangdong Xiongsu Technology, you can compare the effects of market volatilities on Zhongrun Resources and Guangdong Xiongsu 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 Zhongrun Resources with a short position of Guangdong Xiongsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongrun Resources and Guangdong Xiongsu.
Diversification Opportunities for Zhongrun Resources and Guangdong Xiongsu
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhongrun and Guangdong is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Zhongrun Resources Investment and Guangdong Xiongsu Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Xiongsu and Zhongrun Resources 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 Zhongrun Resources Investment are associated (or correlated) with Guangdong Xiongsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Xiongsu has no effect on the direction of Zhongrun Resources i.e., Zhongrun Resources and Guangdong Xiongsu go up and down completely randomly.
Pair Corralation between Zhongrun Resources and Guangdong Xiongsu
Assuming the 90 days trading horizon Zhongrun Resources Investment is expected to generate 0.79 times more return on investment than Guangdong Xiongsu. However, Zhongrun Resources Investment is 1.26 times less risky than Guangdong Xiongsu. It trades about 0.45 of its potential returns per unit of risk. Guangdong Xiongsu Technology is currently generating about 0.17 per unit of risk. If you would invest 133.00 in Zhongrun Resources Investment on September 23, 2024 and sell it today you would earn a total of 226.00 from holding Zhongrun Resources Investment or generate 169.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.36% |
Values | Daily Returns |
Zhongrun Resources Investment vs. Guangdong Xiongsu Technology
Performance |
Timeline |
Zhongrun Resources |
Guangdong Xiongsu |
Zhongrun Resources and Guangdong Xiongsu Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zhongrun Resources and Guangdong Xiongsu
The main advantage of trading using opposite Zhongrun Resources and Guangdong Xiongsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongrun Resources position performs unexpectedly, Guangdong Xiongsu 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 Guangdong Xiongsu will offset losses from the drop in Guangdong Xiongsu's long position.Zhongrun Resources vs. PetroChina Co Ltd | Zhongrun Resources vs. China Mobile Limited | Zhongrun Resources vs. CNOOC Limited | Zhongrun Resources vs. Ping An Insurance |
Guangdong Xiongsu vs. Hubei Dinglong Chemical | Guangdong Xiongsu vs. Yangmei Chemical Co | Guangdong Xiongsu vs. Glodon Software Co | Guangdong Xiongsu vs. Xilong Chemical Co |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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