Correlation Between Shenzhen Kexin and Shandong Mining
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By analyzing existing cross correlation between Shenzhen Kexin Communication and Shandong Mining Machinery, you can compare the effects of market volatilities on Shenzhen Kexin and Shandong Mining 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 Shenzhen Kexin with a short position of Shandong Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Kexin and Shandong Mining.
Diversification Opportunities for Shenzhen Kexin and Shandong Mining
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Shandong is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Kexin Communication and Shandong Mining Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Mining Machinery and Shenzhen Kexin 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 Shenzhen Kexin Communication are associated (or correlated) with Shandong Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Mining Machinery has no effect on the direction of Shenzhen Kexin i.e., Shenzhen Kexin and Shandong Mining go up and down completely randomly.
Pair Corralation between Shenzhen Kexin and Shandong Mining
Assuming the 90 days trading horizon Shenzhen Kexin Communication is expected to under-perform the Shandong Mining. In addition to that, Shenzhen Kexin is 1.33 times more volatile than Shandong Mining Machinery. It trades about -0.02 of its total potential returns per unit of risk. Shandong Mining Machinery is currently generating about 0.05 per unit of volatility. If you would invest 256.00 in Shandong Mining Machinery on September 4, 2024 and sell it today you would earn a total of 140.00 from holding Shandong Mining Machinery or generate 54.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Kexin Communication vs. Shandong Mining Machinery
Performance |
| Timeline |
| Shenzhen Kexin Commu |
| Shandong Mining Machinery |
Shenzhen Kexin and Shandong Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Kexin and Shandong Mining
The main advantage of trading using opposite Shenzhen Kexin and Shandong Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Kexin position performs unexpectedly, Shandong Mining 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 Shandong Mining will offset losses from the drop in Shandong Mining's long position.| Shenzhen Kexin vs. Anhui Fuhuang Steel | Shenzhen Kexin vs. Guangdong Liantai Environmental | Shenzhen Kexin vs. Anyang Iron Steel | Shenzhen Kexin vs. CSSC Offshore Marine |
| Shandong Mining vs. Xinjiang Communications Construction | Shandong Mining vs. Nanjing Putian Telecommunications | Shandong Mining vs. Jonjee Hi tech Industrial | Shandong Mining vs. Zoje Resources Investment |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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