Correlation Between Shandong Mining and Guangzhou Haige
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By analyzing existing cross correlation between Shandong Mining Machinery and Guangzhou Haige Communications, you can compare the effects of market volatilities on Shandong Mining and Guangzhou Haige 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 Guangzhou Haige. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and Guangzhou Haige.
Diversification Opportunities for Shandong Mining and Guangzhou Haige
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Guangzhou is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and Guangzhou Haige Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Haige Comm 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 Guangzhou Haige. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Haige Comm has no effect on the direction of Shandong Mining i.e., Shandong Mining and Guangzhou Haige go up and down completely randomly.
Pair Corralation between Shandong Mining and Guangzhou Haige
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 1.16 times more return on investment than Guangzhou Haige. However, Shandong Mining is 1.16 times more volatile than Guangzhou Haige Communications. It trades about 0.08 of its potential returns per unit of risk. Guangzhou Haige Communications is currently generating about 0.04 per unit of risk. If you would invest 272.00 in Shandong Mining Machinery on September 12, 2024 and sell it today you would earn a total of 292.00 from holding Shandong Mining Machinery or generate 107.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Mining Machinery vs. Guangzhou Haige Communications
Performance |
| Timeline |
| Shandong Mining Machinery |
| Guangzhou Haige Comm |
Shandong Mining and Guangzhou Haige Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Mining and Guangzhou Haige
The main advantage of trading using opposite Shandong Mining and Guangzhou Haige positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, Guangzhou Haige 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 Guangzhou Haige will offset losses from the drop in Guangzhou Haige's long position.| Shandong Mining vs. Agricultural Bank of | Shandong Mining vs. Industrial and Commercial | Shandong Mining vs. Bank of China | Shandong Mining vs. PetroChina Co Ltd |
| Guangzhou Haige vs. Gansu Jiu Steel | Guangzhou Haige vs. Shandong Mining Machinery | Guangzhou Haige vs. Aba Chemicals Corp | Guangzhou Haige vs. BlueFocus Communication Group |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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