Correlation Between Shengda Mining and China Citic
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By analyzing existing cross correlation between Shengda Mining Co and China Citic Bank, you can compare the effects of market volatilities on Shengda Mining and China Citic 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 Citic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shengda Mining and China Citic.
Diversification Opportunities for Shengda Mining and China Citic
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shengda and China is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Shengda Mining Co and China Citic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Citic 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 Citic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Citic Bank has no effect on the direction of Shengda Mining i.e., Shengda Mining and China Citic go up and down completely randomly.
Pair Corralation between Shengda Mining and China Citic
Assuming the 90 days trading horizon Shengda Mining Co is expected to generate 1.08 times more return on investment than China Citic. However, Shengda Mining is 1.08 times more volatile than China Citic Bank. It trades about -0.04 of its potential returns per unit of risk. China Citic Bank is currently generating about -0.05 per unit of risk. If you would invest 1,287 in Shengda Mining Co on October 17, 2024 and sell it today you would lose (20.00) from holding Shengda Mining Co or give up 1.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shengda Mining Co vs. China Citic Bank
Performance |
| Timeline |
| Shengda Mining |
| China Citic Bank |
Shengda Mining and China Citic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shengda Mining and China Citic
The main advantage of trading using opposite Shengda Mining and China Citic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shengda Mining position performs unexpectedly, China Citic 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 Citic will offset losses from the drop in China Citic's long position.| Shengda Mining vs. Hangzhou Minsheng Healthcare | Shengda Mining vs. Lotus Health Group | Shengda Mining vs. Ningxia Building Materials | Shengda Mining vs. Keda Clean Energy |
| China Citic vs. Shengda Mining Co | China Citic vs. AVIC Fund Management | China Citic vs. China Asset Management | China Citic vs. Tibet Huayu Mining |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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