Correlation Between Shenyang Huitian and Guocheng Mining
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By analyzing existing cross correlation between Shenyang Huitian Thermal and Guocheng Mining Co, you can compare the effects of market volatilities on Shenyang Huitian and Guocheng Mining 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 Shenyang Huitian with a short position of Guocheng Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Huitian and Guocheng Mining.
Diversification Opportunities for Shenyang Huitian and Guocheng Mining
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenyang and Guocheng is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Huitian Thermal and Guocheng Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guocheng Mining and Shenyang Huitian 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 Shenyang Huitian Thermal are associated (or correlated) with Guocheng Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guocheng Mining has no effect on the direction of Shenyang Huitian i.e., Shenyang Huitian and Guocheng Mining go up and down completely randomly.
Pair Corralation between Shenyang Huitian and Guocheng Mining
Assuming the 90 days trading horizon Shenyang Huitian Thermal is expected to under-perform the Guocheng Mining. But the stock apears to be less risky and, when comparing its historical volatility, Shenyang Huitian Thermal is 1.82 times less risky than Guocheng Mining. The stock trades about -0.05 of its potential returns per unit of risk. The Guocheng Mining Co is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,262 in Guocheng Mining Co on September 13, 2024 and sell it today you would earn a total of 268.00 from holding Guocheng Mining Co or generate 21.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenyang Huitian Thermal vs. Guocheng Mining Co
Performance |
| Timeline |
| Shenyang Huitian Thermal |
| Guocheng Mining |
Shenyang Huitian and Guocheng Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenyang Huitian and Guocheng Mining
The main advantage of trading using opposite Shenyang Huitian and Guocheng Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Huitian position performs unexpectedly, Guocheng Mining 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 Guocheng Mining will offset losses from the drop in Guocheng Mining's long position.| Shenyang Huitian vs. Zhangjiagang Freetrade Science | Shenyang Huitian vs. Citic Guoan Wine | Shenyang Huitian vs. YiDong Electronics Technology | Shenyang Huitian vs. Success Electronics |
| Guocheng Mining vs. Cambricon Technologies Corp | Guocheng Mining vs. Loongson Technology Corp | Guocheng Mining vs. Shenzhen Fortune Trend | Guocheng Mining vs. Chongqing Road Bridge |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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