Correlation Between Shandong Gold and Zhejiang Transfar
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By analyzing existing cross correlation between Shandong Gold Mining and Zhejiang Transfar Co, you can compare the effects of market volatilities on Shandong Gold and Zhejiang Transfar 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 Zhejiang Transfar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Gold and Zhejiang Transfar.
Diversification Opportunities for Shandong Gold and Zhejiang Transfar
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shandong and Zhejiang is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Gold Mining and Zhejiang Transfar Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Transfar 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 Zhejiang Transfar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Transfar has no effect on the direction of Shandong Gold i.e., Shandong Gold and Zhejiang Transfar go up and down completely randomly.
Pair Corralation between Shandong Gold and Zhejiang Transfar
Assuming the 90 days trading horizon Shandong Gold Mining is expected to under-perform the Zhejiang Transfar. But the stock apears to be less risky and, when comparing its historical volatility, Shandong Gold Mining is 3.32 times less risky than Zhejiang Transfar. The stock trades about -0.26 of its potential returns per unit of risk. The Zhejiang Transfar Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 425.00 in Zhejiang Transfar Co on September 4, 2024 and sell it today you would earn a total of 85.00 from holding Zhejiang Transfar Co or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Shandong Gold Mining vs. Zhejiang Transfar Co
Performance |
| Timeline |
| Shandong Gold Mining |
| Zhejiang Transfar |
Shandong Gold and Zhejiang Transfar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Gold and Zhejiang Transfar
The main advantage of trading using opposite Shandong Gold and Zhejiang Transfar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Gold position performs unexpectedly, Zhejiang Transfar 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 Zhejiang Transfar will offset losses from the drop in Zhejiang Transfar's long position.| Shandong Gold vs. Long Yuan Construction | Shandong Gold vs. Allied Machinery Co | Shandong Gold vs. Innovative Medical Management | Shandong Gold vs. Guangdong Advertising Co |
| Zhejiang Transfar vs. Iat Automobile Technology | Zhejiang Transfar vs. Chahua Modern Housewares | Zhejiang Transfar vs. Haima Automobile Group | Zhejiang Transfar vs. Shenzhen Kexin 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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