Correlation Between Shengda Mining and Xiamen Bank
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By analyzing existing cross correlation between Shengda Mining Co and Xiamen Bank Co, you can compare the effects of market volatilities on Shengda Mining and Xiamen Bank 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 Xiamen Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shengda Mining and Xiamen Bank.
Diversification Opportunities for Shengda Mining and Xiamen Bank
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shengda and Xiamen is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Shengda Mining Co and Xiamen Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen 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 Xiamen Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Bank has no effect on the direction of Shengda Mining i.e., Shengda Mining and Xiamen Bank go up and down completely randomly.
Pair Corralation between Shengda Mining and Xiamen Bank
Assuming the 90 days trading horizon Shengda Mining Co is expected to under-perform the Xiamen Bank. But the stock apears to be less risky and, when comparing its historical volatility, Shengda Mining Co is 1.02 times less risky than Xiamen Bank. The stock trades about -0.12 of its potential returns per unit of risk. The Xiamen Bank Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 541.00 in Xiamen Bank Co on September 28, 2024 and sell it today you would earn a total of 22.00 from holding Xiamen Bank Co or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shengda Mining Co vs. Xiamen Bank Co
Performance |
| Timeline |
| Shengda Mining |
| Xiamen Bank |
Shengda Mining and Xiamen Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shengda Mining and Xiamen Bank
The main advantage of trading using opposite Shengda Mining and Xiamen Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shengda Mining position performs unexpectedly, Xiamen Bank 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 Xiamen Bank will offset losses from the drop in Xiamen Bank's long position.| Shengda Mining vs. Zijin Mining Group | Shengda Mining vs. Wanhua Chemical Group | Shengda Mining vs. Baoshan Iron Steel | Shengda Mining vs. Shandong Gold Mining |
| Xiamen Bank vs. Western Mining Co | Xiamen Bank vs. Shengda Mining Co | Xiamen Bank vs. Huaibei Mining Holdings | Xiamen Bank vs. Zijin Mining Group |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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