Correlation Between Shandong Mining and Xilinmen Furniture
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By analyzing existing cross correlation between Shandong Mining Machinery and Xilinmen Furniture Co, you can compare the effects of market volatilities on Shandong Mining and Xilinmen Furniture 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 Xilinmen Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and Xilinmen Furniture.
Diversification Opportunities for Shandong Mining and Xilinmen Furniture
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shandong and Xilinmen is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and Xilinmen Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilinmen Furniture 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 Xilinmen Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilinmen Furniture has no effect on the direction of Shandong Mining i.e., Shandong Mining and Xilinmen Furniture go up and down completely randomly.
Pair Corralation between Shandong Mining and Xilinmen Furniture
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 2.13 times more return on investment than Xilinmen Furniture. However, Shandong Mining is 2.13 times more volatile than Xilinmen Furniture Co. It trades about 0.08 of its potential returns per unit of risk. Xilinmen Furniture Co is currently generating about -0.1 per unit of risk. If you would invest 383.00 in Shandong Mining Machinery on October 24, 2024 and sell it today you would earn a total of 18.00 from holding Shandong Mining Machinery or generate 4.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Mining Machinery vs. Xilinmen Furniture Co
Performance |
| Timeline |
| Shandong Mining Machinery |
| Xilinmen Furniture |
Shandong Mining and Xilinmen Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Mining and Xilinmen Furniture
The main advantage of trading using opposite Shandong Mining and Xilinmen Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, Xilinmen Furniture 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 Xilinmen Furniture will offset losses from the drop in Xilinmen Furniture's long position.| Shandong Mining vs. Anyang Iron Steel | Shandong Mining vs. Zhejiang Construction Investment | Shandong Mining vs. Luyin Investment Group | Shandong Mining vs. China Eastern Airlines |
| Xilinmen Furniture vs. BeiGene | Xilinmen Furniture vs. Kweichow Moutai Co | Xilinmen Furniture vs. Beijing Roborock Technology | Xilinmen Furniture vs. G bits Network Technology |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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