Correlation Between Shandong Mining and Huatai Securities
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By analyzing existing cross correlation between Shandong Mining Machinery and Huatai Securities Co, you can compare the effects of market volatilities on Shandong Mining and Huatai Securities 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 Huatai Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and Huatai Securities.
Diversification Opportunities for Shandong Mining and Huatai Securities
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shandong and Huatai is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and Huatai Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huatai Securities 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 Huatai Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huatai Securities has no effect on the direction of Shandong Mining i.e., Shandong Mining and Huatai Securities go up and down completely randomly.
Pair Corralation between Shandong Mining and Huatai Securities
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 4.53 times more return on investment than Huatai Securities. However, Shandong Mining is 4.53 times more volatile than Huatai Securities Co. It trades about 0.3 of its potential returns per unit of risk. Huatai Securities Co is currently generating about -0.11 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 163.00 from holding Shandong Mining Machinery or generate 55.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Mining Machinery vs. Huatai Securities Co
Performance |
| Timeline |
| Shandong Mining Machinery |
| Huatai Securities |
Shandong Mining and Huatai Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Mining and Huatai Securities
The main advantage of trading using opposite Shandong Mining and Huatai Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, Huatai Securities 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 Huatai Securities will offset losses from the drop in Huatai Securities' 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 |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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