Correlation Between Guocheng Mining and Shandong Link
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By analyzing existing cross correlation between Guocheng Mining Co and Shandong Link Science, you can compare the effects of market volatilities on Guocheng Mining and Shandong Link 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 Guocheng Mining with a short position of Shandong Link. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guocheng Mining and Shandong Link.
Diversification Opportunities for Guocheng Mining and Shandong Link
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guocheng and Shandong is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Guocheng Mining Co and Shandong Link Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Link Science and Guocheng 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 Guocheng Mining Co are associated (or correlated) with Shandong Link. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Link Science has no effect on the direction of Guocheng Mining i.e., Guocheng Mining and Shandong Link go up and down completely randomly.
Pair Corralation between Guocheng Mining and Shandong Link
Assuming the 90 days trading horizon Guocheng Mining is expected to generate 8.44 times less return on investment than Shandong Link. In addition to that, Guocheng Mining is 1.05 times more volatile than Shandong Link Science. It trades about 0.01 of its total potential returns per unit of risk. Shandong Link Science is currently generating about 0.05 per unit of volatility. If you would invest 1,281 in Shandong Link Science on September 13, 2024 and sell it today you would earn a total of 832.00 from holding Shandong Link Science or generate 64.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guocheng Mining Co vs. Shandong Link Science
Performance |
| Timeline |
| Guocheng Mining |
| Shandong Link Science |
Guocheng Mining and Shandong Link Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guocheng Mining and Shandong Link
The main advantage of trading using opposite Guocheng Mining and Shandong Link positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guocheng Mining position performs unexpectedly, Shandong Link 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 Shandong Link will offset losses from the drop in Shandong Link's long position.| Guocheng Mining vs. Cambricon Technologies Corp | Guocheng Mining vs. Loongson Technology Corp | Guocheng Mining vs. Shenzhen Fortune Trend | Guocheng Mining vs. Chongqing Road Bridge |
| Shandong Link vs. Sanbo Hospital Management | Shandong Link vs. Huaibei Mining Holdings | Shandong Link vs. Guocheng Mining Co | Shandong Link vs. Jiangxi Naipu 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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