Correlation Between Shandong Mining and Shenzhen Kexin
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By analyzing existing cross correlation between Shandong Mining Machinery and Shenzhen Kexin Communication, you can compare the effects of market volatilities on Shandong Mining and Shenzhen Kexin 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 Shenzhen Kexin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and Shenzhen Kexin.
Diversification Opportunities for Shandong Mining and Shenzhen Kexin
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Shenzhen is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and Shenzhen Kexin Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Kexin Commu 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 Shenzhen Kexin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Kexin Commu has no effect on the direction of Shandong Mining i.e., Shandong Mining and Shenzhen Kexin go up and down completely randomly.
Pair Corralation between Shandong Mining and Shenzhen Kexin
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 1.4 times more return on investment than Shenzhen Kexin. However, Shandong Mining is 1.4 times more volatile than Shenzhen Kexin Communication. It trades about 0.32 of its potential returns per unit of risk. Shenzhen Kexin Communication is currently generating about -0.25 per unit of risk. If you would invest 273.00 in Shandong Mining Machinery on September 3, 2024 and sell it today you would earn a total of 87.00 from holding Shandong Mining Machinery or generate 31.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Mining Machinery vs. Shenzhen Kexin Communication
Performance |
| Timeline |
| Shandong Mining Machinery |
| Shenzhen Kexin Commu |
Shandong Mining and Shenzhen Kexin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Mining and Shenzhen Kexin
The main advantage of trading using opposite Shandong Mining and Shenzhen Kexin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, Shenzhen Kexin 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 Shenzhen Kexin will offset losses from the drop in Shenzhen Kexin's long position.| Shandong Mining vs. Cultural Investment Holdings | Shandong Mining vs. Gome Telecom Equipment | Shandong Mining vs. Bus Online Co | Shandong Mining vs. Holitech Technology Co |
| Shenzhen Kexin vs. Agricultural Bank of | Shenzhen Kexin vs. China Construction Bank | Shenzhen Kexin vs. Postal Savings Bank | Shenzhen Kexin vs. Bank of Communications |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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