Correlation Between Shandong Mining and Shenzhen Centralcon
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By analyzing existing cross correlation between Shandong Mining Machinery and Shenzhen Centralcon Investment, you can compare the effects of market volatilities on Shandong Mining and Shenzhen Centralcon 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 Shandong Mining with a short position of Shenzhen Centralcon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and Shenzhen Centralcon.
Diversification Opportunities for Shandong Mining and Shenzhen Centralcon
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Shenzhen is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and Shenzhen Centralcon Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Centralcon and Shandong 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 Shandong Mining Machinery are associated (or correlated) with Shenzhen Centralcon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Centralcon has no effect on the direction of Shandong Mining i.e., Shandong Mining and Shenzhen Centralcon go up and down completely randomly.
Pair Corralation between Shandong Mining and Shenzhen Centralcon
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 1.13 times more return on investment than Shenzhen Centralcon. However, Shandong Mining is 1.13 times more volatile than Shenzhen Centralcon Investment. It trades about 0.17 of its potential returns per unit of risk. Shenzhen Centralcon Investment is currently generating about 0.06 per unit of risk. If you would invest 252.00 in Shandong Mining Machinery on September 13, 2024 and sell it today you would earn a total of 256.00 from holding Shandong Mining Machinery or generate 101.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Mining Machinery vs. Shenzhen Centralcon Investment
Performance |
| Timeline |
| Shandong Mining Machinery |
| Shenzhen Centralcon |
Shandong Mining and Shenzhen Centralcon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Mining and Shenzhen Centralcon
The main advantage of trading using opposite Shandong Mining and Shenzhen Centralcon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, Shenzhen Centralcon 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 Shenzhen Centralcon will offset losses from the drop in Shenzhen Centralcon's long position.| Shandong Mining vs. China Petroleum Chemical | Shandong Mining vs. PetroChina Co Ltd | Shandong Mining vs. China State Construction | Shandong Mining vs. China Railway Group |
| Shenzhen Centralcon vs. China Life Insurance | Shenzhen Centralcon vs. Cinda Securities Co | Shenzhen Centralcon vs. Piotech Inc A | Shenzhen Centralcon vs. Dongxing Sec 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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