Correlation Between Shandong Mining and Hunan Mendale
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By analyzing existing cross correlation between Shandong Mining Machinery and Hunan Mendale Hometextile, you can compare the effects of market volatilities on Shandong Mining and Hunan Mendale 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 Hunan Mendale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and Hunan Mendale.
Diversification Opportunities for Shandong Mining and Hunan Mendale
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shandong and Hunan is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and Hunan Mendale Hometextile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Mendale Hometextile 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 Hunan Mendale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Mendale Hometextile has no effect on the direction of Shandong Mining i.e., Shandong Mining and Hunan Mendale go up and down completely randomly.
Pair Corralation between Shandong Mining and Hunan Mendale
Assuming the 90 days trading horizon Shandong Mining is expected to generate 3.33 times less return on investment than Hunan Mendale. But when comparing it to its historical volatility, Shandong Mining Machinery is 1.88 times less risky than Hunan Mendale. It trades about 0.08 of its potential returns per unit of risk. Hunan Mendale Hometextile is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 287.00 in Hunan Mendale Hometextile on October 23, 2024 and sell it today you would earn a total of 44.00 from holding Hunan Mendale Hometextile or generate 15.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Shandong Mining Machinery vs. Hunan Mendale Hometextile
Performance |
| Timeline |
| Shandong Mining Machinery |
| Hunan Mendale Hometextile |
Shandong Mining and Hunan Mendale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Mining and Hunan Mendale
The main advantage of trading using opposite Shandong Mining and Hunan Mendale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, Hunan Mendale 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 Hunan Mendale will offset losses from the drop in Hunan Mendale's long position.| Shandong Mining vs. Agricultural Bank of | Shandong Mining vs. Industrial and Commercial | Shandong Mining vs. Bank of China | Shandong Mining vs. China Construction Bank |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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