Correlation Between Wintao Communications and Shandong Mining
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By analyzing existing cross correlation between Wintao Communications Co and Shandong Mining Machinery, you can compare the effects of market volatilities on Wintao Communications 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 Wintao Communications with a short position of Shandong Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wintao Communications and Shandong Mining.
Diversification Opportunities for Wintao Communications and Shandong Mining
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wintao and Shandong is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Wintao Communications Co 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 Wintao Communications 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 Wintao Communications Co 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 Wintao Communications i.e., Wintao Communications and Shandong Mining go up and down completely randomly.
Pair Corralation between Wintao Communications and Shandong Mining
Assuming the 90 days trading horizon Wintao Communications is expected to generate 2.65 times less return on investment than Shandong Mining. But when comparing it to its historical volatility, Wintao Communications Co is 1.3 times less risky than Shandong Mining. It trades about 0.16 of its potential returns per unit of risk. Shandong Mining Machinery is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 211.00 in Shandong Mining Machinery on September 12, 2024 and sell it today you would earn a total of 297.00 from holding Shandong Mining Machinery or generate 140.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wintao Communications Co vs. Shandong Mining Machinery
Performance |
| Timeline |
| Wintao Communications |
| Shandong Mining Machinery |
Wintao Communications and Shandong Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wintao Communications and Shandong Mining
The main advantage of trading using opposite Wintao Communications and Shandong Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wintao Communications 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.| Wintao Communications vs. Industrial and Commercial | Wintao Communications vs. China Construction Bank | Wintao Communications vs. Agricultural Bank of | Wintao Communications vs. Bank of China |
| Shandong Mining vs. China Petroleum Chemical | Shandong Mining vs. PetroChina Co Ltd | Shandong Mining vs. China State Construction | Shandong Mining vs. China Railway 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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