Correlation Between Shengda Mining and Fujian Wanchen
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By analyzing existing cross correlation between Shengda Mining Co and Fujian Wanchen Biotechnology, you can compare the effects of market volatilities on Shengda Mining and Fujian Wanchen 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 Shengda Mining with a short position of Fujian Wanchen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shengda Mining and Fujian Wanchen.
Diversification Opportunities for Shengda Mining and Fujian Wanchen
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shengda and Fujian is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Shengda Mining Co and Fujian Wanchen Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Wanchen Biote and Shengda Mining 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 Shengda Mining Co are associated (or correlated) with Fujian Wanchen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Wanchen Biote has no effect on the direction of Shengda Mining i.e., Shengda Mining and Fujian Wanchen go up and down completely randomly.
Pair Corralation between Shengda Mining and Fujian Wanchen
Assuming the 90 days trading horizon Shengda Mining is expected to generate 2.38 times less return on investment than Fujian Wanchen. But when comparing it to its historical volatility, Shengda Mining Co is 1.74 times less risky than Fujian Wanchen. It trades about 0.29 of its potential returns per unit of risk. Fujian Wanchen Biotechnology is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 7,678 in Fujian Wanchen Biotechnology on October 28, 2024 and sell it today you would earn a total of 2,401 from holding Fujian Wanchen Biotechnology or generate 31.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shengda Mining Co vs. Fujian Wanchen Biotechnology
Performance |
| Timeline |
| Shengda Mining |
| Fujian Wanchen Biote |
Shengda Mining and Fujian Wanchen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shengda Mining and Fujian Wanchen
The main advantage of trading using opposite Shengda Mining and Fujian Wanchen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shengda Mining position performs unexpectedly, Fujian Wanchen 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 Fujian Wanchen will offset losses from the drop in Fujian Wanchen's long position.| Shengda Mining vs. China Building Material | Shengda Mining vs. Jilin OLED Material | Shengda Mining vs. Advanced Technology Materials | Shengda Mining vs. Super Dragon Engineering Plastics |
| Fujian Wanchen vs. JCHX Mining Management | Fujian Wanchen vs. Sanbo Hospital Management | Fujian Wanchen vs. Longmaster Information Tech | Fujian Wanchen vs. Hygon Information Technology |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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