Correlation Between Shandong Mining and Guocheng Mining
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By analyzing existing cross correlation between Shandong Mining Machinery and Guocheng Mining Co, you can compare the effects of market volatilities on Shandong Mining 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 Shandong Mining with a short position of Guocheng Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and Guocheng Mining.
Diversification Opportunities for Shandong Mining and Guocheng Mining
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Guocheng is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and Guocheng Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guocheng Mining 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 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 Shandong Mining i.e., Shandong Mining and Guocheng Mining go up and down completely randomly.
Pair Corralation between Shandong Mining and Guocheng Mining
Assuming the 90 days trading horizon Shandong Mining is expected to generate 1.68 times less return on investment than Guocheng Mining. But when comparing it to its historical volatility, Shandong Mining Machinery is 1.15 times less risky than Guocheng Mining. It trades about 0.14 of its potential returns per unit of risk. Guocheng Mining Co is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,029 in Guocheng Mining Co on August 27, 2024 and sell it today you would earn a total of 366.00 from holding Guocheng Mining Co or generate 35.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Mining Machinery vs. Guocheng Mining Co
Performance |
| Timeline |
| Shandong Mining Machinery |
| Guocheng Mining |
Shandong Mining and Guocheng Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Mining and Guocheng Mining
The main advantage of trading using opposite Shandong Mining and Guocheng Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining 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.| Shandong Mining vs. Jinhui Mining Co | Shandong Mining vs. Chenzhou Jingui Silver | Shandong Mining vs. Huaibei Mining Holdings | Shandong Mining vs. Tianjin Silvery Dragon |
| Guocheng Mining vs. Industrial and Commercial | Guocheng Mining vs. Agricultural Bank of | Guocheng Mining vs. China Construction Bank | Guocheng Mining vs. Bank of China |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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