Correlation Between Shandong Mining and Bank of China
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By analyzing existing cross correlation between Shandong Mining Machinery and Bank of China, you can compare the effects of market volatilities on Shandong Mining and Bank of China 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 Bank of China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and Bank of China.
Diversification Opportunities for Shandong Mining and Bank of China
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Bank is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and Bank of China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of China 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 Bank of China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of China has no effect on the direction of Shandong Mining i.e., Shandong Mining and Bank of China go up and down completely randomly.
Pair Corralation between Shandong Mining and Bank of China
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 2.56 times more return on investment than Bank of China. However, Shandong Mining is 2.56 times more volatile than Bank of China. It trades about 0.08 of its potential returns per unit of risk. Bank of China is currently generating about 0.08 per unit of risk. If you would invest 272.00 in Shandong Mining Machinery on September 12, 2024 and sell it today you would earn a total of 292.00 from holding Shandong Mining Machinery or generate 107.35% 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. Bank of China
Performance |
| Timeline |
| Shandong Mining Machinery |
| Bank of China |
Shandong Mining and Bank of China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Mining and Bank of China
The main advantage of trading using opposite Shandong Mining and Bank of China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, Bank of China 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 Bank of China will offset losses from the drop in Bank of China's long position.| Shandong Mining vs. Agricultural Bank of | Shandong Mining vs. Industrial and Commercial | Shandong Mining vs. Bank of China | Shandong Mining vs. PetroChina Co Ltd |
| Bank of China vs. Chenzhou Jingui Silver | Bank of China vs. Hangzhou Pinming Software | Bank of China vs. Shandong Mining Machinery | Bank of China vs. Tibet Huayu 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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