Correlation Between Shandong Mining and Beijing HuaYuanYiTong
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By analyzing existing cross correlation between Shandong Mining Machinery and Beijing HuaYuanYiTong Thermal, you can compare the effects of market volatilities on Shandong Mining and Beijing HuaYuanYiTong 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 Beijing HuaYuanYiTong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and Beijing HuaYuanYiTong.
Diversification Opportunities for Shandong Mining and Beijing HuaYuanYiTong
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shandong and Beijing is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and Beijing HuaYuanYiTong Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing HuaYuanYiTong 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 Beijing HuaYuanYiTong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing HuaYuanYiTong has no effect on the direction of Shandong Mining i.e., Shandong Mining and Beijing HuaYuanYiTong go up and down completely randomly.
Pair Corralation between Shandong Mining and Beijing HuaYuanYiTong
Assuming the 90 days trading horizon Shandong Mining is expected to generate 1.29 times less return on investment than Beijing HuaYuanYiTong. In addition to that, Shandong Mining is 1.11 times more volatile than Beijing HuaYuanYiTong Thermal. It trades about 0.12 of its total potential returns per unit of risk. Beijing HuaYuanYiTong Thermal is currently generating about 0.17 per unit of volatility. If you would invest 948.00 in Beijing HuaYuanYiTong Thermal on December 1, 2024 and sell it today you would earn a total of 104.00 from holding Beijing HuaYuanYiTong Thermal or generate 10.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Mining Machinery vs. Beijing HuaYuanYiTong Thermal
Performance |
| Timeline |
| Shandong Mining Machinery |
| Beijing HuaYuanYiTong |
Shandong Mining and Beijing HuaYuanYiTong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Mining and Beijing HuaYuanYiTong
The main advantage of trading using opposite Shandong Mining and Beijing HuaYuanYiTong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, Beijing HuaYuanYiTong 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 Beijing HuaYuanYiTong will offset losses from the drop in Beijing HuaYuanYiTong's long position.| Shandong Mining vs. Fujian Newland Computer | Shandong Mining vs. Qingdao Hi Tech Moulds | Shandong Mining vs. Sichuan Fulin Transportation | Shandong Mining vs. Kuang Chi Technologies |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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