Correlation Between Shenzhen Jinxinnong and Zhengzhou Coal

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Can any of the company-specific risk be diversified away by investing in both Shenzhen Jinxinnong and Zhengzhou Coal at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Shenzhen Jinxinnong and Zhengzhou Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shenzhen Jinxinnong Feed and Zhengzhou Coal Mining, you can compare the effects of market volatilities on Shenzhen Jinxinnong and Zhengzhou Coal 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 Shenzhen Jinxinnong with a short position of Zhengzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Jinxinnong and Zhengzhou Coal.

Diversification Opportunities for Shenzhen Jinxinnong and Zhengzhou Coal

-0.04
  Correlation Coefficient

Good diversification

The 3 months correlation between Shenzhen and Zhengzhou is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Jinxinnong Feed and Zhengzhou Coal Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhengzhou Coal Mining and Shenzhen Jinxinnong 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 Shenzhen Jinxinnong Feed are associated (or correlated) with Zhengzhou Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhengzhou Coal Mining has no effect on the direction of Shenzhen Jinxinnong i.e., Shenzhen Jinxinnong and Zhengzhou Coal go up and down completely randomly.

Pair Corralation between Shenzhen Jinxinnong and Zhengzhou Coal

Assuming the 90 days trading horizon Shenzhen Jinxinnong is expected to generate 1.43 times less return on investment than Zhengzhou Coal. In addition to that, Shenzhen Jinxinnong is 1.11 times more volatile than Zhengzhou Coal Mining. It trades about 0.04 of its total potential returns per unit of risk. Zhengzhou Coal Mining is currently generating about 0.07 per unit of volatility. If you would invest  2,260  in Zhengzhou Coal Mining on September 13, 2025 and sell it today you would earn a total of  195.00  from holding Zhengzhou Coal Mining or generate 8.63% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Shenzhen Jinxinnong Feed  vs.  Zhengzhou Coal Mining

 Performance 
       Timeline  
Shenzhen Jinxinnong Feed 

Risk-Adjusted Performance

Soft

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen Jinxinnong Feed are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shenzhen Jinxinnong may actually be approaching a critical reversion point that can send shares even higher in January 2026.
Zhengzhou Coal Mining 

Risk-Adjusted Performance

Soft

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Zhengzhou Coal Mining are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Zhengzhou Coal may actually be approaching a critical reversion point that can send shares even higher in January 2026.

Shenzhen Jinxinnong and Zhengzhou Coal Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Shenzhen Jinxinnong and Zhengzhou Coal

The main advantage of trading using opposite Shenzhen Jinxinnong and Zhengzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Jinxinnong position performs unexpectedly, Zhengzhou Coal 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 Zhengzhou Coal will offset losses from the drop in Zhengzhou Coal's long position.
The idea behind Shenzhen Jinxinnong Feed and Zhengzhou Coal Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

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