Correlation Between Shandong Mining and Guangdong Qunxing
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By analyzing existing cross correlation between Shandong Mining Machinery and Guangdong Qunxing Toys, you can compare the effects of market volatilities on Shandong Mining and Guangdong Qunxing 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 Guangdong Qunxing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and Guangdong Qunxing.
Diversification Opportunities for Shandong Mining and Guangdong Qunxing
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Guangdong is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and Guangdong Qunxing Toys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Qunxing Toys 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 Guangdong Qunxing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Qunxing Toys has no effect on the direction of Shandong Mining i.e., Shandong Mining and Guangdong Qunxing go up and down completely randomly.
Pair Corralation between Shandong Mining and Guangdong Qunxing
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 1.04 times more return on investment than Guangdong Qunxing. However, Shandong Mining is 1.04 times more volatile than Guangdong Qunxing Toys. It trades about 0.07 of its potential returns per unit of risk. Guangdong Qunxing Toys is currently generating about 0.04 per unit of risk. If you would invest 251.00 in Shandong Mining Machinery on October 22, 2024 and sell it today you would earn a total of 137.00 from holding Shandong Mining Machinery or generate 54.58% 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. Guangdong Qunxing Toys
Performance |
| Timeline |
| Shandong Mining Machinery |
| Guangdong Qunxing Toys |
Shandong Mining and Guangdong Qunxing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Mining and Guangdong Qunxing
The main advantage of trading using opposite Shandong Mining and Guangdong Qunxing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, Guangdong Qunxing 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 Guangdong Qunxing will offset losses from the drop in Guangdong Qunxing's long position.| Shandong Mining vs. Jiugui Liquor Co | Shandong Mining vs. Jinhui Liquor Co | Shandong Mining vs. Western Mining Co | Shandong Mining vs. Shenyang Blue Silver |
| Guangdong Qunxing vs. Weihai Honglin Electronic | Guangdong Qunxing vs. Xizi Clean Energy | Guangdong Qunxing vs. Fuzhou Rockchip Electronics | Guangdong Qunxing vs. Guangzhou Restaurants 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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