Correlation Between Shengda Mining and Epoxy Base
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By analyzing existing cross correlation between Shengda Mining Co and Epoxy Base Electronic, you can compare the effects of market volatilities on Shengda Mining and Epoxy Base 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 Epoxy Base. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shengda Mining and Epoxy Base.
Diversification Opportunities for Shengda Mining and Epoxy Base
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shengda and Epoxy is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Shengda Mining Co and Epoxy Base Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epoxy Base Electronic 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 Epoxy Base. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Epoxy Base Electronic has no effect on the direction of Shengda Mining i.e., Shengda Mining and Epoxy Base go up and down completely randomly.
Pair Corralation between Shengda Mining and Epoxy Base
Assuming the 90 days trading horizon Shengda Mining Co is expected to generate 0.55 times more return on investment than Epoxy Base. However, Shengda Mining Co is 1.82 times less risky than Epoxy Base. It trades about 0.42 of its potential returns per unit of risk. Epoxy Base Electronic is currently generating about 0.17 per unit of risk. If you would invest 1,207 in Shengda Mining Co on November 7, 2024 and sell it today you would earn a total of 177.00 from holding Shengda Mining Co or generate 14.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shengda Mining Co vs. Epoxy Base Electronic
Performance |
| Timeline |
| Shengda Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Epoxy Base Electronic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shengda Mining and Epoxy Base Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shengda Mining and Epoxy Base
The main advantage of trading using opposite Shengda Mining and Epoxy Base positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shengda Mining position performs unexpectedly, Epoxy Base 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 Epoxy Base will offset losses from the drop in Epoxy Base's long position.The idea behind Shengda Mining Co and Epoxy Base Electronic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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