Correlation Between Shantui Construction and Shanxi Xishan
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By analyzing existing cross correlation between Shantui Construction Machinery and Shanxi Xishan Coal, you can compare the effects of market volatilities on Shantui Construction and Shanxi Xishan 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 Shantui Construction with a short position of Shanxi Xishan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shantui Construction and Shanxi Xishan.
Diversification Opportunities for Shantui Construction and Shanxi Xishan
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shantui and Shanxi is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Shantui Construction Machinery and Shanxi Xishan Coal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanxi Xishan Coal and Shantui Construction 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 Shantui Construction Machinery are associated (or correlated) with Shanxi Xishan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanxi Xishan Coal has no effect on the direction of Shantui Construction i.e., Shantui Construction and Shanxi Xishan go up and down completely randomly.
Pair Corralation between Shantui Construction and Shanxi Xishan
Assuming the 90 days trading horizon Shantui Construction Machinery is expected to generate 1.41 times more return on investment than Shanxi Xishan. However, Shantui Construction is 1.41 times more volatile than Shanxi Xishan Coal. It trades about 0.09 of its potential returns per unit of risk. Shanxi Xishan Coal is currently generating about 0.03 per unit of risk. If you would invest 487.00 in Shantui Construction Machinery on September 12, 2024 and sell it today you would earn a total of 516.00 from holding Shantui Construction Machinery or generate 105.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shantui Construction Machinery vs. Shanxi Xishan Coal
Performance |
| Timeline |
| Shantui Construction |
| Shanxi Xishan Coal |
Shantui Construction and Shanxi Xishan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shantui Construction and Shanxi Xishan
The main advantage of trading using opposite Shantui Construction and Shanxi Xishan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shantui Construction position performs unexpectedly, Shanxi Xishan 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 Shanxi Xishan will offset losses from the drop in Shanxi Xishan's long position.| Shantui Construction vs. Agricultural Bank of | Shantui Construction vs. Industrial and Commercial | Shantui Construction vs. Bank of China | Shantui Construction vs. PetroChina Co Ltd |
| Shanxi Xishan vs. Jiangsu Yanghe Brewery | Shanxi Xishan vs. Shanghai Construction Group | Shanxi Xishan vs. Nanxing Furniture Machinery | Shanxi Xishan vs. Shantui Construction Machinery |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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