Correlation Between Shandong Mining and China Resources
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By analyzing existing cross correlation between Shandong Mining Machinery and China Resources Microelectronics, you can compare the effects of market volatilities on Shandong Mining and China Resources 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 China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and China Resources.
Diversification Opportunities for Shandong Mining and China Resources
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shandong and China is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and China Resources Microelectroni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Micr 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 China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Micr has no effect on the direction of Shandong Mining i.e., Shandong Mining and China Resources go up and down completely randomly.
Pair Corralation between Shandong Mining and China Resources
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 3.46 times more return on investment than China Resources. However, Shandong Mining is 3.46 times more volatile than China Resources Microelectronics. It trades about 0.49 of its potential returns per unit of risk. China Resources Microelectronics is currently generating about -0.33 per unit of risk. If you would invest 302.00 in Shandong Mining Machinery on September 12, 2024 and sell it today you would earn a total of 262.00 from holding Shandong Mining Machinery or generate 86.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shandong Mining Machinery vs. China Resources Microelectroni
Performance |
| Timeline |
| Shandong Mining Machinery |
| China Resources Micr |
Shandong Mining and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Mining and China Resources
The main advantage of trading using opposite Shandong Mining and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' 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 |
| China Resources vs. Gansu Jiu Steel | China Resources vs. Shandong Mining Machinery | China Resources vs. Aba Chemicals Corp | China Resources vs. BlueFocus Communication 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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