Correlation Between Shandong Gold and Shenzhen Noposion
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By analyzing existing cross correlation between Shandong Gold Mining and Shenzhen Noposion Agrochemicals, you can compare the effects of market volatilities on Shandong Gold and Shenzhen Noposion 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 Shenzhen Noposion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Gold and Shenzhen Noposion.
Diversification Opportunities for Shandong Gold and Shenzhen Noposion
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shandong and Shenzhen is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Gold Mining and Shenzhen Noposion Agrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Noposion 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 Shenzhen Noposion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Noposion has no effect on the direction of Shandong Gold i.e., Shandong Gold and Shenzhen Noposion go up and down completely randomly.
Pair Corralation between Shandong Gold and Shenzhen Noposion
Assuming the 90 days trading horizon Shandong Gold Mining is expected to under-perform the Shenzhen Noposion. But the stock apears to be less risky and, when comparing its historical volatility, Shandong Gold Mining is 2.28 times less risky than Shenzhen Noposion. The stock trades about -0.36 of its potential returns per unit of risk. The Shenzhen Noposion Agrochemicals is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 913.00 in Shenzhen Noposion Agrochemicals on August 25, 2024 and sell it today you would earn a total of 36.00 from holding Shenzhen Noposion Agrochemicals or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Gold Mining vs. Shenzhen Noposion Agrochemical
Performance |
| Timeline |
| Shandong Gold Mining |
| Shenzhen Noposion |
Shandong Gold and Shenzhen Noposion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Gold and Shenzhen Noposion
The main advantage of trading using opposite Shandong Gold and Shenzhen Noposion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Gold position performs unexpectedly, Shenzhen Noposion 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 Shenzhen Noposion will offset losses from the drop in Shenzhen Noposion's long position.| Shandong Gold vs. Xian International Medical | Shandong Gold vs. Lutian Machinery Co | Shandong Gold vs. Shaanxi Construction Machinery | Shandong Gold vs. Ningbo Construction Co |
| Shenzhen Noposion vs. Zijin Mining Group | Shenzhen Noposion vs. Wanhua Chemical Group | Shenzhen Noposion vs. Baoshan Iron Steel | Shenzhen Noposion vs. Shandong Gold Mining |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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