Correlation Between Shandong Mining and Wintao Communications
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By analyzing existing cross correlation between Shandong Mining Machinery and Wintao Communications Co, you can compare the effects of market volatilities on Shandong Mining and Wintao Communications 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 Wintao Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and Wintao Communications.
Diversification Opportunities for Shandong Mining and Wintao Communications
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Wintao is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and Wintao Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wintao Communications 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 Wintao Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wintao Communications has no effect on the direction of Shandong Mining i.e., Shandong Mining and Wintao Communications go up and down completely randomly.
Pair Corralation between Shandong Mining and Wintao Communications
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 1.3 times more return on investment than Wintao Communications. However, Shandong Mining is 1.3 times more volatile than Wintao Communications Co. It trades about 0.32 of its potential returns per unit of risk. Wintao Communications Co is currently generating about 0.16 per unit of risk. If you would invest 211.00 in Shandong Mining Machinery on September 12, 2024 and sell it today you would earn a total of 297.00 from holding Shandong Mining Machinery or generate 140.76% 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. Wintao Communications Co
Performance |
| Timeline |
| Shandong Mining Machinery |
| Wintao Communications |
Shandong Mining and Wintao Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Mining and Wintao Communications
The main advantage of trading using opposite Shandong Mining and Wintao Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, Wintao Communications 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 Wintao Communications will offset losses from the drop in Wintao Communications' long position.| Shandong Mining vs. China Petroleum Chemical | Shandong Mining vs. PetroChina Co Ltd | Shandong Mining vs. China State Construction | Shandong Mining vs. China Railway Group |
| Wintao Communications vs. Industrial and Commercial | Wintao Communications vs. China Construction Bank | Wintao Communications vs. Agricultural Bank of | Wintao Communications vs. Bank of China |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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