Correlation Between Inner Mongolia and Shandong Rike
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By analyzing existing cross correlation between Inner Mongolia BaoTou and Shandong Rike Chemical, you can compare the effects of market volatilities on Inner Mongolia and Shandong Rike 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 Shandong Rike. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inner Mongolia and Shandong Rike.
Diversification Opportunities for Inner Mongolia and Shandong Rike
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Inner and Shandong is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Inner Mongolia BaoTou and Shandong Rike Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Rike Chemical 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 Shandong Rike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Rike Chemical has no effect on the direction of Inner Mongolia i.e., Inner Mongolia and Shandong Rike go up and down completely randomly.
Pair Corralation between Inner Mongolia and Shandong Rike
Assuming the 90 days trading horizon Inner Mongolia is expected to generate 2.0 times less return on investment than Shandong Rike. In addition to that, Inner Mongolia is 1.05 times more volatile than Shandong Rike Chemical. It trades about 0.04 of its total potential returns per unit of risk. Shandong Rike Chemical is currently generating about 0.09 per unit of volatility. If you would invest 562.00 in Shandong Rike Chemical on September 2, 2024 and sell it today you would earn a total of 32.00 from holding Shandong Rike Chemical or generate 5.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inner Mongolia BaoTou vs. Shandong Rike Chemical
Performance |
| Timeline |
| Inner Mongolia BaoTou |
| Shandong Rike Chemical |
Inner Mongolia and Shandong Rike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inner Mongolia and Shandong Rike
The main advantage of trading using opposite Inner Mongolia and Shandong Rike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inner Mongolia position performs unexpectedly, Shandong Rike 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 Rike will offset losses from the drop in Shandong Rike's long position.| Inner Mongolia vs. XinJiang GuoTong Pipeline | Inner Mongolia vs. PKU HealthCare Corp | Inner Mongolia vs. De Rucci Healthy | Inner Mongolia vs. Anhui Deli Household |
| Shandong Rike vs. Zijin Mining Group | Shandong Rike vs. Wanhua Chemical Group | Shandong Rike vs. Baoshan Iron Steel | Shandong Rike 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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