Correlation Between Shandong Mining and Zhejiang Juhua
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By analyzing existing cross correlation between Shandong Mining Machinery and Zhejiang Juhua Co, you can compare the effects of market volatilities on Shandong Mining and Zhejiang Juhua 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 Zhejiang Juhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and Zhejiang Juhua.
Diversification Opportunities for Shandong Mining and Zhejiang Juhua
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Zhejiang is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and Zhejiang Juhua Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Juhua 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 Zhejiang Juhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Juhua has no effect on the direction of Shandong Mining i.e., Shandong Mining and Zhejiang Juhua go up and down completely randomly.
Pair Corralation between Shandong Mining and Zhejiang Juhua
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 2.98 times more return on investment than Zhejiang Juhua. However, Shandong Mining is 2.98 times more volatile than Zhejiang Juhua Co. It trades about 0.4 of its potential returns per unit of risk. Zhejiang Juhua Co is currently generating about 0.02 per unit of risk. If you would invest 294.00 in Shandong Mining Machinery on September 13, 2024 and sell it today you would earn a total of 214.00 from holding Shandong Mining Machinery or generate 72.79% 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. Zhejiang Juhua Co
Performance |
| Timeline |
| Shandong Mining Machinery |
| Zhejiang Juhua |
Shandong Mining and Zhejiang Juhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Mining and Zhejiang Juhua
The main advantage of trading using opposite Shandong Mining and Zhejiang Juhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, Zhejiang Juhua 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 Zhejiang Juhua will offset losses from the drop in Zhejiang Juhua's 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 |
| Zhejiang Juhua vs. Postal Savings Bank | Zhejiang Juhua vs. Shandong Hongchuang Aluminum | Zhejiang Juhua vs. Chongqing Shunbo Aluminum | Zhejiang Juhua vs. Dymatic Chemicals |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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