Correlation Between Shandong Mining and Zhongshan Broad-Ocean
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By analyzing existing cross correlation between Shandong Mining Machinery and Zhongshan Broad Ocean Motor, you can compare the effects of market volatilities on Shandong Mining and Zhongshan Broad-Ocean 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 Broad-Ocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and Zhongshan Broad-Ocean.
Diversification Opportunities for Shandong Mining and Zhongshan Broad-Ocean
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Zhongshan is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and Zhongshan Broad Ocean Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongshan Broad Ocean 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 Broad-Ocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongshan Broad Ocean has no effect on the direction of Shandong Mining i.e., Shandong Mining and Zhongshan Broad-Ocean go up and down completely randomly.
Pair Corralation between Shandong Mining and Zhongshan Broad-Ocean
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 3.08 times more return on investment than Zhongshan Broad-Ocean. However, Shandong Mining is 3.08 times more volatile than Zhongshan Broad Ocean Motor. It trades about 0.33 of its potential returns per unit of risk. Zhongshan Broad Ocean Motor is currently generating about -0.11 per unit of risk. If you would invest 267.00 in Shandong Mining Machinery on September 2, 2024 and sell it today you would earn a total of 93.00 from holding Shandong Mining Machinery or generate 34.83% 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. Zhongshan Broad Ocean Motor
Performance |
| Timeline |
| Shandong Mining Machinery |
| Zhongshan Broad Ocean |
Shandong Mining and Zhongshan Broad-Ocean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Mining and Zhongshan Broad-Ocean
The main advantage of trading using opposite Shandong Mining and Zhongshan Broad-Ocean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, Zhongshan Broad-Ocean 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 Broad-Ocean will offset losses from the drop in Zhongshan Broad-Ocean's long position.| Shandong Mining vs. Cultural Investment Holdings | Shandong Mining vs. Gome Telecom Equipment | Shandong Mining vs. Bus Online Co | Shandong Mining vs. Holitech Technology Co |
| Zhongshan Broad-Ocean vs. Bosera ChiNext ETF | Zhongshan Broad-Ocean vs. Gansu Jiu Steel | Zhongshan Broad-Ocean vs. Shenzhen MTC Co | Zhongshan Broad-Ocean vs. Ming Yang Smart |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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