Correlation Between Shandong Mining and Suzhou Douson
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By analyzing existing cross correlation between Shandong Mining Machinery and Suzhou Douson Drilling, you can compare the effects of market volatilities on Shandong Mining and Suzhou Douson 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 Suzhou Douson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and Suzhou Douson.
Diversification Opportunities for Shandong Mining and Suzhou Douson
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Suzhou is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and Suzhou Douson Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou Douson Drilling 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 Suzhou Douson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou Douson Drilling has no effect on the direction of Shandong Mining i.e., Shandong Mining and Suzhou Douson go up and down completely randomly.
Pair Corralation between Shandong Mining and Suzhou Douson
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 0.96 times more return on investment than Suzhou Douson. However, Shandong Mining Machinery is 1.04 times less risky than Suzhou Douson. It trades about 0.08 of its potential returns per unit of risk. Suzhou Douson Drilling is currently generating about 0.02 per unit of risk. If you would invest 218.00 in Shandong Mining Machinery on September 12, 2024 and sell it today you would earn a total of 346.00 from holding Shandong Mining Machinery or generate 158.72% 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. Suzhou Douson Drilling
Performance |
| Timeline |
| Shandong Mining Machinery |
| Suzhou Douson Drilling |
Shandong Mining and Suzhou Douson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Mining and Suzhou Douson
The main advantage of trading using opposite Shandong Mining and Suzhou Douson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, Suzhou Douson 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 Suzhou Douson will offset losses from the drop in Suzhou Douson'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 |
| Suzhou Douson vs. Zhejiang Kingland Pipeline | Suzhou Douson vs. Gansu Jiu Steel | Suzhou Douson vs. Shandong Mining Machinery | Suzhou Douson vs. Aba Chemicals Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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