Correlation Between Shandong Mining and HeNan Splendor
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By analyzing existing cross correlation between Shandong Mining Machinery and HeNan Splendor Science, you can compare the effects of market volatilities on Shandong Mining and HeNan Splendor 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 HeNan Splendor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and HeNan Splendor.
Diversification Opportunities for Shandong Mining and HeNan Splendor
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and HeNan is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and HeNan Splendor Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HeNan Splendor Science 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 HeNan Splendor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HeNan Splendor Science has no effect on the direction of Shandong Mining i.e., Shandong Mining and HeNan Splendor go up and down completely randomly.
Pair Corralation between Shandong Mining and HeNan Splendor
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 0.98 times more return on investment than HeNan Splendor. However, Shandong Mining Machinery is 1.02 times less risky than HeNan Splendor. It trades about 0.09 of its potential returns per unit of risk. HeNan Splendor Science is currently generating about 0.02 per unit of risk. If you would invest 272.00 in Shandong Mining Machinery on September 2, 2024 and sell it today you would earn a total of 88.00 from holding Shandong Mining Machinery or generate 32.35% 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. HeNan Splendor Science
Performance |
| Timeline |
| Shandong Mining Machinery |
| HeNan Splendor Science |
Shandong Mining and HeNan Splendor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Mining and HeNan Splendor
The main advantage of trading using opposite Shandong Mining and HeNan Splendor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, HeNan Splendor 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 HeNan Splendor will offset losses from the drop in HeNan Splendor'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 |
| HeNan Splendor vs. Ligao Foods CoLtd | HeNan Splendor vs. Zoje Resources Investment | HeNan Splendor vs. Shanghai Ziyan Foods | HeNan Splendor vs. Hubei Geoway Investment |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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