Correlation Between Sino Platinum and Shanxi Lanhua
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By analyzing existing cross correlation between Sino Platinum Metals Co and Shanxi Lanhua Sci Tech, you can compare the effects of market volatilities on Sino Platinum and Shanxi Lanhua 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 Sino Platinum with a short position of Shanxi Lanhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino Platinum and Shanxi Lanhua.
Diversification Opportunities for Sino Platinum and Shanxi Lanhua
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sino and Shanxi is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sino Platinum Metals Co and Shanxi Lanhua Sci Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanxi Lanhua Sci and Sino Platinum 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 Sino Platinum Metals Co are associated (or correlated) with Shanxi Lanhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanxi Lanhua Sci has no effect on the direction of Sino Platinum i.e., Sino Platinum and Shanxi Lanhua go up and down completely randomly.
Pair Corralation between Sino Platinum and Shanxi Lanhua
Assuming the 90 days trading horizon Sino Platinum Metals Co is expected to under-perform the Shanxi Lanhua. But the stock apears to be less risky and, when comparing its historical volatility, Sino Platinum Metals Co is 1.46 times less risky than Shanxi Lanhua. The stock trades about -0.16 of its potential returns per unit of risk. The Shanxi Lanhua Sci Tech is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 883.00 in Shanxi Lanhua Sci Tech on September 12, 2024 and sell it today you would earn a total of 43.00 from holding Shanxi Lanhua Sci Tech or generate 4.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sino Platinum Metals Co vs. Shanxi Lanhua Sci Tech
Performance |
| Timeline |
| Sino Platinum Metals |
| Shanxi Lanhua Sci |
Sino Platinum and Shanxi Lanhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sino Platinum and Shanxi Lanhua
The main advantage of trading using opposite Sino Platinum and Shanxi Lanhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sino Platinum position performs unexpectedly, Shanxi Lanhua 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 Shanxi Lanhua will offset losses from the drop in Shanxi Lanhua's long position.| Sino Platinum vs. Zijin Mining Group | Sino Platinum vs. Wanhua Chemical Group | Sino Platinum vs. Baoshan Iron Steel | Sino Platinum vs. Rongsheng Petrochemical Co |
| Shanxi Lanhua vs. Gansu Jiu Steel | Shanxi Lanhua vs. Shandong Mining Machinery | Shanxi Lanhua vs. Aba Chemicals Corp | Shanxi Lanhua vs. BlueFocus Communication 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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