Correlation Between Shandong Gold and Jiaozuo Wanfang
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By analyzing existing cross correlation between Shandong Gold Mining and Jiaozuo Wanfang Aluminum, you can compare the effects of market volatilities on Shandong Gold and Jiaozuo Wanfang 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 Shandong Gold with a short position of Jiaozuo Wanfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Gold and Jiaozuo Wanfang.
Diversification Opportunities for Shandong Gold and Jiaozuo Wanfang
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Jiaozuo is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Gold Mining and Jiaozuo Wanfang Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiaozuo Wanfang Aluminum and Shandong Gold 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 Shandong Gold Mining are associated (or correlated) with Jiaozuo Wanfang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiaozuo Wanfang Aluminum has no effect on the direction of Shandong Gold i.e., Shandong Gold and Jiaozuo Wanfang go up and down completely randomly.
Pair Corralation between Shandong Gold and Jiaozuo Wanfang
Assuming the 90 days trading horizon Shandong Gold Mining is expected to under-perform the Jiaozuo Wanfang. But the stock apears to be less risky and, when comparing its historical volatility, Shandong Gold Mining is 1.68 times less risky than Jiaozuo Wanfang. The stock trades about -0.1 of its potential returns per unit of risk. The Jiaozuo Wanfang Aluminum is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 773.00 in Jiaozuo Wanfang Aluminum on October 26, 2024 and sell it today you would lose (59.00) from holding Jiaozuo Wanfang Aluminum or give up 7.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Gold Mining vs. Jiaozuo Wanfang Aluminum
Performance |
| Timeline |
| Shandong Gold Mining |
| Jiaozuo Wanfang Aluminum |
Shandong Gold and Jiaozuo Wanfang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Gold and Jiaozuo Wanfang
The main advantage of trading using opposite Shandong Gold and Jiaozuo Wanfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Gold position performs unexpectedly, Jiaozuo Wanfang 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 Jiaozuo Wanfang will offset losses from the drop in Jiaozuo Wanfang's long position.| Shandong Gold vs. Easyhome New Retail | Shandong Gold vs. AUPU Home Style | Shandong Gold vs. Ningbo Fujia Industrial | Shandong Gold vs. Xinjiang Baodi Mining |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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