Correlation Between Tengda Construction and Shandong Mining
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By analyzing existing cross correlation between Tengda Construction Group and Shandong Mining Machinery, you can compare the effects of market volatilities on Tengda Construction 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 Tengda Construction with a short position of Shandong Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tengda Construction and Shandong Mining.
Diversification Opportunities for Tengda Construction and Shandong Mining
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tengda and Shandong is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Tengda Construction Group 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 Tengda Construction 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 Tengda Construction Group 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 Tengda Construction i.e., Tengda Construction and Shandong Mining go up and down completely randomly.
Pair Corralation between Tengda Construction and Shandong Mining
Assuming the 90 days trading horizon Tengda Construction Group is expected to under-perform the Shandong Mining. But the stock apears to be less risky and, when comparing its historical volatility, Tengda Construction Group is 1.56 times less risky than Shandong Mining. The stock trades about 0.0 of its potential returns per unit of risk. The Shandong Mining Machinery is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 230.00 in Shandong Mining Machinery on September 4, 2024 and sell it today you would earn a total of 166.00 from holding Shandong Mining Machinery or generate 72.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tengda Construction Group vs. Shandong Mining Machinery
Performance |
| Timeline |
| Tengda Construction |
| Shandong Mining Machinery |
Tengda Construction and Shandong Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tengda Construction and Shandong Mining
The main advantage of trading using opposite Tengda Construction and Shandong Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tengda Construction 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.| Tengda Construction vs. Zhejiang Kingland Pipeline | Tengda Construction vs. Longmaster Information Tech | Tengda Construction vs. Yonyou Auto Information | Tengda Construction vs. Keda Clean Energy |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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