Correlation Between Shengda Mining and Pengxin International
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By analyzing existing cross correlation between Shengda Mining Co and Pengxin International Mining, you can compare the effects of market volatilities on Shengda Mining and Pengxin International 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 Pengxin International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shengda Mining and Pengxin International.
Diversification Opportunities for Shengda Mining and Pengxin International
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shengda and Pengxin is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Shengda Mining Co and Pengxin International Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pengxin International 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 Pengxin International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pengxin International has no effect on the direction of Shengda Mining i.e., Shengda Mining and Pengxin International go up and down completely randomly.
Pair Corralation between Shengda Mining and Pengxin International
Assuming the 90 days trading horizon Shengda Mining is expected to generate 1.69 times less return on investment than Pengxin International. But when comparing it to its historical volatility, Shengda Mining Co is 1.32 times less risky than Pengxin International. It trades about 0.14 of its potential returns per unit of risk. Pengxin International Mining is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 217.00 in Pengxin International Mining on August 30, 2024 and sell it today you would earn a total of 96.00 from holding Pengxin International Mining or generate 44.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.28% |
| Values | Daily Returns |
Shengda Mining Co vs. Pengxin International Mining
Performance |
| Timeline |
| Shengda Mining |
| Pengxin International |
Shengda Mining and Pengxin International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shengda Mining and Pengxin International
The main advantage of trading using opposite Shengda Mining and Pengxin International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shengda Mining position performs unexpectedly, Pengxin International 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 Pengxin International will offset losses from the drop in Pengxin International's long position.| Shengda Mining vs. Juewei Food Co | Shengda Mining vs. Tianjin Pengling Rubber | Shengda Mining vs. Jiangsu Financial Leasing | Shengda Mining vs. Guangzhou Tinci Materials |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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