Correlation Between Shandong Mining and Hainan Drinda
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By analyzing existing cross correlation between Shandong Mining Machinery and Hainan Drinda Automotive, you can compare the effects of market volatilities on Shandong Mining and Hainan Drinda 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 Hainan Drinda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and Hainan Drinda.
Diversification Opportunities for Shandong Mining and Hainan Drinda
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shandong and Hainan is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and Hainan Drinda Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Drinda Automotive 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 Hainan Drinda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Drinda Automotive has no effect on the direction of Shandong Mining i.e., Shandong Mining and Hainan Drinda go up and down completely randomly.
Pair Corralation between Shandong Mining and Hainan Drinda
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 0.9 times more return on investment than Hainan Drinda. However, Shandong Mining Machinery is 1.11 times less risky than Hainan Drinda. It trades about 0.09 of its potential returns per unit of risk. Hainan Drinda Automotive is currently generating about 0.01 per unit of risk. If you would invest 271.00 in Shandong Mining Machinery on September 12, 2024 and sell it today you would earn a total of 237.00 from holding Shandong Mining Machinery or generate 87.45% 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. Hainan Drinda Automotive
Performance |
| Timeline |
| Shandong Mining Machinery |
| Hainan Drinda Automotive |
Shandong Mining and Hainan Drinda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Mining and Hainan Drinda
The main advantage of trading using opposite Shandong Mining and Hainan Drinda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, Hainan Drinda 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 Hainan Drinda will offset losses from the drop in Hainan Drinda'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 |
| Hainan Drinda vs. Gansu Jiu Steel | Hainan Drinda vs. Shandong Mining Machinery | Hainan Drinda vs. Aba Chemicals Corp | Hainan Drinda 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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