Correlation Between Shandong Mining and CITIC Metal
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By analyzing existing cross correlation between Shandong Mining Machinery and CITIC Metal Co, you can compare the effects of market volatilities on Shandong Mining and CITIC Metal 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 CITIC Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and CITIC Metal.
Diversification Opportunities for Shandong Mining and CITIC Metal
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shandong and CITIC is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and CITIC Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Metal 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 CITIC Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Metal has no effect on the direction of Shandong Mining i.e., Shandong Mining and CITIC Metal go up and down completely randomly.
Pair Corralation between Shandong Mining and CITIC Metal
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 1.01 times more return on investment than CITIC Metal. However, Shandong Mining is 1.01 times more volatile than CITIC Metal Co. It trades about 0.03 of its potential returns per unit of risk. CITIC Metal Co is currently generating about -0.02 per unit of risk. If you would invest 236.00 in Shandong Mining Machinery on August 30, 2024 and sell it today you would earn a total of 61.00 from holding Shandong Mining Machinery or generate 25.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 83.44% |
| Values | Daily Returns |
Shandong Mining Machinery vs. CITIC Metal Co
Performance |
| Timeline |
| Shandong Mining Machinery |
| CITIC Metal |
Shandong Mining and CITIC Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Mining and CITIC Metal
The main advantage of trading using opposite Shandong Mining and CITIC Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, CITIC Metal 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 CITIC Metal will offset losses from the drop in CITIC Metal's long position.| Shandong Mining vs. China Life Insurance | Shandong Mining vs. Cinda Securities Co | Shandong Mining vs. Piotech Inc A | Shandong Mining vs. Dongxing Sec Co |
| CITIC Metal vs. Zijin Mining Group | CITIC Metal vs. Wanhua Chemical Group | CITIC Metal vs. Baoshan Iron Steel | CITIC Metal vs. Shandong Gold Mining |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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