Correlation Between Shandong Mining and RoadMain T
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By analyzing existing cross correlation between Shandong Mining Machinery and RoadMain T Co, you can compare the effects of market volatilities on Shandong Mining and RoadMain T 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 RoadMain T. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and RoadMain T.
Diversification Opportunities for Shandong Mining and RoadMain T
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and RoadMain is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and RoadMain T Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RoadMain T 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 RoadMain T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RoadMain T has no effect on the direction of Shandong Mining i.e., Shandong Mining and RoadMain T go up and down completely randomly.
Pair Corralation between Shandong Mining and RoadMain T
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 2.05 times more return on investment than RoadMain T. However, Shandong Mining is 2.05 times more volatile than RoadMain T Co. It trades about 0.33 of its potential returns per unit of risk. RoadMain T Co is currently generating about -0.12 per unit of risk. If you would invest 267.00 in Shandong Mining Machinery on September 2, 2024 and sell it today you would earn a total of 93.00 from holding Shandong Mining Machinery or generate 34.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Mining Machinery vs. RoadMain T Co
Performance |
| Timeline |
| Shandong Mining Machinery |
| RoadMain T |
Shandong Mining and RoadMain T Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Mining and RoadMain T
The main advantage of trading using opposite Shandong Mining and RoadMain T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, RoadMain T 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 RoadMain T will offset losses from the drop in RoadMain T's long position.| Shandong Mining vs. Cultural Investment Holdings | Shandong Mining vs. Gome Telecom Equipment | Shandong Mining vs. Bus Online Co | Shandong Mining vs. Holitech Technology Co |
| RoadMain T vs. Biwin Storage Technology | RoadMain T vs. PetroChina Co Ltd | RoadMain T vs. Industrial and Commercial | RoadMain T vs. China Construction Bank |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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