Correlation Between Shengda Mining and China Merchants
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By analyzing existing cross correlation between Shengda Mining Co and China Merchants Bank, you can compare the effects of market volatilities on Shengda Mining and China Merchants 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 China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shengda Mining and China Merchants.
Diversification Opportunities for Shengda Mining and China Merchants
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shengda and China is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Shengda Mining Co and China Merchants Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Merchants Bank 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 China Merchants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Merchants Bank has no effect on the direction of Shengda Mining i.e., Shengda Mining and China Merchants go up and down completely randomly.
Pair Corralation between Shengda Mining and China Merchants
Assuming the 90 days trading horizon Shengda Mining Co is expected to under-perform the China Merchants. In addition to that, Shengda Mining is 1.59 times more volatile than China Merchants Bank. It trades about -0.29 of its total potential returns per unit of risk. China Merchants Bank is currently generating about -0.26 per unit of volatility. If you would invest 3,875 in China Merchants Bank on September 3, 2024 and sell it today you would lose (241.00) from holding China Merchants Bank or give up 6.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shengda Mining Co vs. China Merchants Bank
Performance |
| Timeline |
| Shengda Mining |
| China Merchants Bank |
Shengda Mining and China Merchants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shengda Mining and China Merchants
The main advantage of trading using opposite Shengda Mining and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shengda Mining position performs unexpectedly, China Merchants 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 China Merchants will offset losses from the drop in China Merchants' long position.| Shengda Mining vs. Zijin Mining Group | Shengda Mining vs. Baoshan Iron Steel | Shengda Mining vs. Rongsheng Petrochemical Co | Shengda Mining vs. Hoshine Silicon Ind |
| China Merchants vs. Hainan Mining Co | China Merchants vs. Shengda Mining Co | China Merchants vs. Jonjee Hi tech Industrial | China Merchants vs. Tianjin Hi Tech Development |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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