Correlation Between Shandong Gold and Lianhe Chemical
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By analyzing existing cross correlation between Shandong Gold Mining and Lianhe Chemical Technology, you can compare the effects of market volatilities on Shandong Gold and Lianhe 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 Lianhe Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Gold and Lianhe Chemical.
Diversification Opportunities for Shandong Gold and Lianhe Chemical
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shandong and Lianhe is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Gold Mining and Lianhe Chemical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lianhe Chemical Tech 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 Lianhe Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lianhe Chemical Tech has no effect on the direction of Shandong Gold i.e., Shandong Gold and Lianhe Chemical go up and down completely randomly.
Pair Corralation between Shandong Gold and Lianhe Chemical
Assuming the 90 days trading horizon Shandong Gold Mining is expected to generate 0.86 times more return on investment than Lianhe Chemical. However, Shandong Gold Mining is 1.17 times less risky than Lianhe Chemical. It trades about 0.05 of its potential returns per unit of risk. Lianhe Chemical Technology is currently generating about 0.01 per unit of risk. If you would invest 2,048 in Shandong Gold Mining on August 29, 2024 and sell it today you would earn a total of 384.00 from holding Shandong Gold Mining or generate 18.75% 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. Lianhe Chemical Technology
Performance |
| Timeline |
| Shandong Gold Mining |
| Lianhe Chemical Tech |
Shandong Gold and Lianhe Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Gold and Lianhe Chemical
The main advantage of trading using opposite Shandong Gold and Lianhe Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Gold position performs unexpectedly, Lianhe 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 Lianhe Chemical will offset losses from the drop in Lianhe Chemical's long position.| Shandong Gold vs. Dongguan Aohai Technology | Shandong Gold vs. Jiujiang Shanshui Technology | Shandong Gold vs. Guangzhou KingTeller Technology | Shandong Gold vs. GigaDevice SemiconductorBeiji |
| Lianhe Chemical vs. Wanhua Chemical Group | Lianhe Chemical vs. Baoshan Iron Steel | Lianhe Chemical vs. Shandong Gold Mining | Lianhe Chemical vs. Rongsheng Petrochemical Co |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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