Correlation Between HeNan Splendor and Shandong Mining
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By analyzing existing cross correlation between HeNan Splendor Science and Shandong Mining Machinery, you can compare the effects of market volatilities on HeNan Splendor and Shandong 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 HeNan Splendor with a short position of Shandong Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of HeNan Splendor and Shandong Mining.
Diversification Opportunities for HeNan Splendor and Shandong Mining
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HeNan and Shandong is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding HeNan Splendor Science and Shandong Mining Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Mining Machinery and HeNan Splendor 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 HeNan Splendor Science are associated (or correlated) with Shandong Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Mining Machinery has no effect on the direction of HeNan Splendor i.e., HeNan Splendor and Shandong Mining go up and down completely randomly.
Pair Corralation between HeNan Splendor and Shandong Mining
Assuming the 90 days trading horizon HeNan Splendor is expected to generate 1.04 times less return on investment than Shandong Mining. In addition to that, HeNan Splendor is 1.12 times more volatile than Shandong Mining Machinery. It trades about 0.05 of its total potential returns per unit of risk. Shandong Mining Machinery is currently generating about 0.05 per unit of volatility. If you would invest 270.00 in Shandong Mining Machinery on September 2, 2024 and sell it today you would earn a total of 90.00 from holding Shandong Mining Machinery or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HeNan Splendor Science vs. Shandong Mining Machinery
Performance |
| Timeline |
| HeNan Splendor Science |
| Shandong Mining Machinery |
HeNan Splendor and Shandong Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HeNan Splendor and Shandong Mining
The main advantage of trading using opposite HeNan Splendor and Shandong Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HeNan Splendor position performs unexpectedly, Shandong 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 Shandong Mining will offset losses from the drop in Shandong Mining's long position.| HeNan Splendor vs. Ligao Foods CoLtd | HeNan Splendor vs. Zoje Resources Investment | HeNan Splendor vs. Shanghai Ziyan Foods | HeNan Splendor vs. Hubei Geoway Investment |
| Shandong Mining vs. Cultural Investment Holdings | Shandong Mining vs. Gome Telecom Equipment | Shandong Mining vs. Bus Online Co | Shandong Mining vs. Holitech Technology Co |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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