Correlation Between Shandong Mining and Leyard Optoelectronic
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By analyzing existing cross correlation between Shandong Mining Machinery and Leyard Optoelectronic, you can compare the effects of market volatilities on Shandong Mining and Leyard Optoelectronic 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 Leyard Optoelectronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and Leyard Optoelectronic.
Diversification Opportunities for Shandong Mining and Leyard Optoelectronic
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Leyard is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and Leyard Optoelectronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leyard Optoelectronic 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 Leyard Optoelectronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leyard Optoelectronic has no effect on the direction of Shandong Mining i.e., Shandong Mining and Leyard Optoelectronic go up and down completely randomly.
Pair Corralation between Shandong Mining and Leyard Optoelectronic
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 1.17 times more return on investment than Leyard Optoelectronic. However, Shandong Mining is 1.17 times more volatile than Leyard Optoelectronic. It trades about 0.08 of its potential returns per unit of risk. Leyard Optoelectronic is currently generating about 0.02 per unit of risk. If you would invest 218.00 in Shandong Mining Machinery on September 12, 2024 and sell it today you would earn a total of 346.00 from holding Shandong Mining Machinery or generate 158.72% 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. Leyard Optoelectronic
Performance |
| Timeline |
| Shandong Mining Machinery |
| Leyard Optoelectronic |
Shandong Mining and Leyard Optoelectronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Mining and Leyard Optoelectronic
The main advantage of trading using opposite Shandong Mining and Leyard Optoelectronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, Leyard Optoelectronic 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 Leyard Optoelectronic will offset losses from the drop in Leyard Optoelectronic'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 |
| Leyard Optoelectronic vs. Gansu Jiu Steel | Leyard Optoelectronic vs. Shandong Mining Machinery | Leyard Optoelectronic vs. Aba Chemicals Corp | Leyard Optoelectronic 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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