Correlation Between Shengtak New and Zijin Mining
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By analyzing existing cross correlation between Shengtak New Material and Zijin Mining Group, you can compare the effects of market volatilities on Shengtak New and Zijin 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 Shengtak New with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shengtak New and Zijin Mining.
Diversification Opportunities for Shengtak New and Zijin Mining
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shengtak and Zijin is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Shengtak New Material and Zijin Mining Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zijin Mining Group and Shengtak New 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 Shengtak New Material are associated (or correlated) with Zijin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zijin Mining Group has no effect on the direction of Shengtak New i.e., Shengtak New and Zijin Mining go up and down completely randomly.
Pair Corralation between Shengtak New and Zijin Mining
Assuming the 90 days trading horizon Shengtak New Material is expected to under-perform the Zijin Mining. In addition to that, Shengtak New is 1.61 times more volatile than Zijin Mining Group. It trades about -0.03 of its total potential returns per unit of risk. Zijin Mining Group is currently generating about 0.18 per unit of volatility. If you would invest 1,549 in Zijin Mining Group on November 7, 2024 and sell it today you would earn a total of 75.00 from holding Zijin Mining Group or generate 4.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shengtak New Material vs. Zijin Mining Group
Performance |
| Timeline |
| Shengtak New Material |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Zijin Mining Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shengtak New and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shengtak New and Zijin Mining
The main advantage of trading using opposite Shengtak New and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shengtak New position performs unexpectedly, Zijin 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 Zijin Mining will offset losses from the drop in Zijin Mining's long position.The idea behind Shengtak New Material and Zijin Mining Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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