Correlation Between Shandong Mining and Shenzhen Aisidi
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By analyzing existing cross correlation between Shandong Mining Machinery and Shenzhen Aisidi Co, you can compare the effects of market volatilities on Shandong Mining and Shenzhen Aisidi 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 Shenzhen Aisidi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and Shenzhen Aisidi.
Diversification Opportunities for Shandong Mining and Shenzhen Aisidi
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shandong and Shenzhen is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and Shenzhen Aisidi Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Aisidi 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 Shenzhen Aisidi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Aisidi has no effect on the direction of Shandong Mining i.e., Shandong Mining and Shenzhen Aisidi go up and down completely randomly.
Pair Corralation between Shandong Mining and Shenzhen Aisidi
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 1.83 times more return on investment than Shenzhen Aisidi. However, Shandong Mining is 1.83 times more volatile than Shenzhen Aisidi Co. It trades about 0.4 of its potential returns per unit of risk. Shenzhen Aisidi Co is currently generating about 0.0 per unit of risk. If you would invest 294.00 in Shandong Mining Machinery on September 13, 2024 and sell it today you would earn a total of 214.00 from holding Shandong Mining Machinery or generate 72.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Mining Machinery vs. Shenzhen Aisidi Co
Performance |
| Timeline |
| Shandong Mining Machinery |
| Shenzhen Aisidi |
Shandong Mining and Shenzhen Aisidi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Mining and Shenzhen Aisidi
The main advantage of trading using opposite Shandong Mining and Shenzhen Aisidi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, Shenzhen Aisidi 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 Shenzhen Aisidi will offset losses from the drop in Shenzhen Aisidi'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 |
| Shenzhen Aisidi vs. Railway Signal Communication | Shenzhen Aisidi vs. Guilin Seamild Foods | Shenzhen Aisidi vs. Shanghai Ziyan Foods | Shenzhen Aisidi vs. Youyou Foods Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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