Correlation Between Guangdong Jinma and Shengda Mining
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By analyzing existing cross correlation between Guangdong Jinma Entertainment and Shengda Mining Co, you can compare the effects of market volatilities on Guangdong Jinma and Shengda 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 Guangdong Jinma with a short position of Shengda Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Jinma and Shengda Mining.
Diversification Opportunities for Guangdong Jinma and Shengda Mining
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Shengda is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Jinma Entertainment and Shengda Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shengda Mining and Guangdong Jinma 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 Guangdong Jinma Entertainment are associated (or correlated) with Shengda Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shengda Mining has no effect on the direction of Guangdong Jinma i.e., Guangdong Jinma and Shengda Mining go up and down completely randomly.
Pair Corralation between Guangdong Jinma and Shengda Mining
Assuming the 90 days trading horizon Guangdong Jinma Entertainment is expected to generate 1.34 times more return on investment than Shengda Mining. However, Guangdong Jinma is 1.34 times more volatile than Shengda Mining Co. It trades about 0.11 of its potential returns per unit of risk. Shengda Mining Co is currently generating about -0.08 per unit of risk. If you would invest 1,512 in Guangdong Jinma Entertainment on August 28, 2024 and sell it today you would earn a total of 144.00 from holding Guangdong Jinma Entertainment or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Guangdong Jinma Entertainment vs. Shengda Mining Co
Performance |
| Timeline |
| Guangdong Jinma Ente |
| Shengda Mining |
Guangdong Jinma and Shengda Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Jinma and Shengda Mining
The main advantage of trading using opposite Guangdong Jinma and Shengda Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Jinma position performs unexpectedly, Shengda 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 Shengda Mining will offset losses from the drop in Shengda Mining's long position.| Guangdong Jinma vs. Shenzhen MYS Environmental | Guangdong Jinma vs. AVIC Fund Management | Guangdong Jinma vs. Shenzhen Bingchuan Network | Guangdong Jinma vs. Penghua Shenzhen Energy |
| Shengda Mining vs. Zijin Mining Group | Shengda Mining vs. Wanhua Chemical Group | Shengda Mining vs. Baoshan Iron Steel | Shengda Mining vs. Shandong Gold Mining |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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