Correlation Between Inner Mongolia and Shengda Mining
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By analyzing existing cross correlation between Inner Mongolia BaoTou and Shengda Mining Co, you can compare the effects of market volatilities on Inner Mongolia 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 Inner Mongolia with a short position of Shengda Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inner Mongolia and Shengda Mining.
Diversification Opportunities for Inner Mongolia and Shengda Mining
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Inner and Shengda is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Inner Mongolia BaoTou and Shengda Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shengda Mining and Inner Mongolia 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 Inner Mongolia BaoTou 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 Inner Mongolia i.e., Inner Mongolia and Shengda Mining go up and down completely randomly.
Pair Corralation between Inner Mongolia and Shengda Mining
Assuming the 90 days trading horizon Inner Mongolia BaoTou is expected to generate 1.26 times more return on investment than Shengda Mining. However, Inner Mongolia is 1.26 times more volatile than Shengda Mining Co. It trades about 0.21 of its potential returns per unit of risk. Shengda Mining Co is currently generating about -0.07 per unit of risk. If you would invest 163.00 in Inner Mongolia BaoTou on August 25, 2024 and sell it today you would earn a total of 31.00 from holding Inner Mongolia BaoTou or generate 19.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inner Mongolia BaoTou vs. Shengda Mining Co
Performance |
| Timeline |
| Inner Mongolia BaoTou |
| Shengda Mining |
Inner Mongolia and Shengda Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inner Mongolia and Shengda Mining
The main advantage of trading using opposite Inner Mongolia and Shengda Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inner Mongolia 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.| Inner Mongolia vs. Focus Media Information | Inner Mongolia vs. Qilu Bank Co | Inner Mongolia vs. Dalian Zeus Entertainment | Inner Mongolia vs. Jiangsu Financial Leasing |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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