Correlation Between Shandong Gold and Sichuan Yahua
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By analyzing existing cross correlation between Shandong Gold Mining and Sichuan Yahua Industrial, you can compare the effects of market volatilities on Shandong Gold and Sichuan Yahua 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 Sichuan Yahua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Gold and Sichuan Yahua.
Diversification Opportunities for Shandong Gold and Sichuan Yahua
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shandong and Sichuan is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Gold Mining and Sichuan Yahua Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Yahua Industrial 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 Sichuan Yahua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Yahua Industrial has no effect on the direction of Shandong Gold i.e., Shandong Gold and Sichuan Yahua go up and down completely randomly.
Pair Corralation between Shandong Gold and Sichuan Yahua
Assuming the 90 days trading horizon Shandong Gold Mining is expected to under-perform the Sichuan Yahua. But the stock apears to be less risky and, when comparing its historical volatility, Shandong Gold Mining is 1.78 times less risky than Sichuan Yahua. The stock trades about -0.24 of its potential returns per unit of risk. The Sichuan Yahua Industrial is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,087 in Sichuan Yahua Industrial on August 29, 2024 and sell it today you would earn a total of 71.00 from holding Sichuan Yahua Industrial or generate 6.53% 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. Sichuan Yahua Industrial
Performance |
| Timeline |
| Shandong Gold Mining |
| Sichuan Yahua Industrial |
Shandong Gold and Sichuan Yahua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Gold and Sichuan Yahua
The main advantage of trading using opposite Shandong Gold and Sichuan Yahua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Gold position performs unexpectedly, Sichuan Yahua 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 Sichuan Yahua will offset losses from the drop in Sichuan Yahua'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 |
| Sichuan Yahua vs. Baoshan Iron Steel | Sichuan Yahua vs. Shandong Gold Mining | Sichuan Yahua vs. Rongsheng Petrochemical Co | Sichuan Yahua vs. Inner Mongolia BaoTou |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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