Correlation Between Shandong Gold and Shenyang Chemical
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By analyzing existing cross correlation between Shandong Gold Mining and Shenyang Chemical Industry, you can compare the effects of market volatilities on Shandong Gold and Shenyang Chemical 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 Shenyang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Gold and Shenyang Chemical.
Diversification Opportunities for Shandong Gold and Shenyang Chemical
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shandong and Shenyang is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Gold Mining and Shenyang Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenyang Chemical 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 Shenyang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenyang Chemical has no effect on the direction of Shandong Gold i.e., Shandong Gold and Shenyang Chemical go up and down completely randomly.
Pair Corralation between Shandong Gold and Shenyang Chemical
Assuming the 90 days trading horizon Shandong Gold Mining is expected to generate 0.59 times more return on investment than Shenyang Chemical. However, Shandong Gold Mining is 1.71 times less risky than Shenyang Chemical. It trades about 0.14 of its potential returns per unit of risk. Shenyang Chemical Industry is currently generating about -0.15 per unit of risk. If you would invest 2,344 in Shandong Gold Mining on October 22, 2024 and sell it today you would earn a total of 87.00 from holding Shandong Gold Mining or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Gold Mining vs. Shenyang Chemical Industry
Performance |
| Timeline |
| Shandong Gold Mining |
| Shenyang Chemical |
Shandong Gold and Shenyang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Gold and Shenyang Chemical
The main advantage of trading using opposite Shandong Gold and Shenyang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Gold position performs unexpectedly, Shenyang Chemical 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 Shenyang Chemical will offset losses from the drop in Shenyang Chemical's long position.| Shandong Gold vs. XinJiang GuoTong Pipeline | Shandong Gold vs. Fibocom Wireless | Shandong Gold vs. Lotus Health Group | Shandong Gold vs. Goodwill E Health |
| Shenyang Chemical vs. Fibocom Wireless | Shenyang Chemical vs. Changchun Engley Automobile | Shenyang Chemical vs. Harvest Fund Management | Shenyang Chemical vs. Tongyu Communication |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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