Correlation Between Shandong Gold and Yunnan Aluminium
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By analyzing existing cross correlation between Shandong Gold Mining and Yunnan Aluminium Co, you can compare the effects of market volatilities on Shandong Gold and Yunnan Aluminium 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 Yunnan Aluminium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Gold and Yunnan Aluminium.
Diversification Opportunities for Shandong Gold and Yunnan Aluminium
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shandong and Yunnan is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Gold Mining and Yunnan Aluminium Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunnan Aluminium 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 Yunnan Aluminium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunnan Aluminium has no effect on the direction of Shandong Gold i.e., Shandong Gold and Yunnan Aluminium go up and down completely randomly.
Pair Corralation between Shandong Gold and Yunnan Aluminium
Assuming the 90 days trading horizon Shandong Gold Mining is expected to under-perform the Yunnan Aluminium. But the stock apears to be less risky and, when comparing its historical volatility, Shandong Gold Mining is 1.99 times less risky than Yunnan Aluminium. The stock trades about -0.36 of its potential returns per unit of risk. The Yunnan Aluminium Co is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 1,481 in Yunnan Aluminium Co on August 27, 2024 and sell it today you would lose (141.00) from holding Yunnan Aluminium Co or give up 9.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Gold Mining vs. Yunnan Aluminium Co
Performance |
| Timeline |
| Shandong Gold Mining |
| Yunnan Aluminium |
Shandong Gold and Yunnan Aluminium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Gold and Yunnan Aluminium
The main advantage of trading using opposite Shandong Gold and Yunnan Aluminium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Gold position performs unexpectedly, Yunnan Aluminium 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 Yunnan Aluminium will offset losses from the drop in Yunnan Aluminium's long position.| Shandong Gold vs. Luyin Investment Group | Shandong Gold vs. Sichuan Fulin Transportation | Shandong Gold vs. Zhejiang Kingland Pipeline | Shandong Gold vs. Zoje Resources Investment |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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