Correlation Between Shandong Gold and Shandong Hongchuang
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By analyzing existing cross correlation between Shandong Gold Mining and Shandong Hongchuang Aluminum, you can compare the effects of market volatilities on Shandong Gold and Shandong Hongchuang 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 Shandong Hongchuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Gold and Shandong Hongchuang.
Diversification Opportunities for Shandong Gold and Shandong Hongchuang
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shandong and Shandong is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Gold Mining and Shandong Hongchuang Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Hongchuang 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 Shandong Hongchuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Hongchuang has no effect on the direction of Shandong Gold i.e., Shandong Gold and Shandong Hongchuang go up and down completely randomly.
Pair Corralation between Shandong Gold and Shandong Hongchuang
Assuming the 90 days trading horizon Shandong Gold is expected to generate 3.32 times less return on investment than Shandong Hongchuang. But when comparing it to its historical volatility, Shandong Gold Mining is 2.47 times less risky than Shandong Hongchuang. It trades about 0.16 of its potential returns per unit of risk. Shandong Hongchuang Aluminum is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 897.00 in Shandong Hongchuang Aluminum on November 3, 2024 and sell it today you would earn a total of 144.00 from holding Shandong Hongchuang Aluminum or generate 16.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Shandong Gold Mining vs. Shandong Hongchuang Aluminum
Performance |
| Timeline |
| Shandong Gold Mining |
| Shandong Hongchuang |
Shandong Gold and Shandong Hongchuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Gold and Shandong Hongchuang
The main advantage of trading using opposite Shandong Gold and Shandong Hongchuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Gold position performs unexpectedly, Shandong Hongchuang 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 Shandong Hongchuang will offset losses from the drop in Shandong Hongchuang's long position.| Shandong Gold vs. Queclink Wireless Solutions | Shandong Gold vs. Allied Machinery Co | Shandong Gold vs. Ningbo Construction Co | Shandong Gold vs. Nanxing Furniture Machinery |
| Shandong Hongchuang vs. Eastern Communications Co | Shandong Hongchuang vs. Qtone Education Group | Shandong Hongchuang vs. Sinomach Automobile Co | Shandong Hongchuang vs. Wintao Communications 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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