Correlation Between Shandong Mining and Zhongshan Public
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By analyzing existing cross correlation between Shandong Mining Machinery and Zhongshan Public Utilities, you can compare the effects of market volatilities on Shandong Mining and Zhongshan Public 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 Zhongshan Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and Zhongshan Public.
Diversification Opportunities for Shandong Mining and Zhongshan Public
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Zhongshan is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and Zhongshan Public Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongshan Public Uti 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 Zhongshan Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongshan Public Uti has no effect on the direction of Shandong Mining i.e., Shandong Mining and Zhongshan Public go up and down completely randomly.
Pair Corralation between Shandong Mining and Zhongshan Public
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 1.8 times more return on investment than Zhongshan Public. However, Shandong Mining is 1.8 times more volatile than Zhongshan Public Utilities. It trades about 0.32 of its potential returns per unit of risk. Zhongshan Public Utilities is currently generating about 0.16 per unit of risk. If you would invest 211.00 in Shandong Mining Machinery on September 12, 2024 and sell it today you would earn a total of 297.00 from holding Shandong Mining Machinery or generate 140.76% 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. Zhongshan Public Utilities
Performance |
| Timeline |
| Shandong Mining Machinery |
| Zhongshan Public Uti |
Shandong Mining and Zhongshan Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Mining and Zhongshan Public
The main advantage of trading using opposite Shandong Mining and Zhongshan Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, Zhongshan Public 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 Zhongshan Public will offset losses from the drop in Zhongshan Public'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 |
| Zhongshan Public vs. Ningbo Tip Rubber | Zhongshan Public vs. Western Mining Co | Zhongshan Public vs. Cangzhou Mingzhu Plastic | Zhongshan Public vs. Chongqing Sulian Plastic |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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