Correlation Between Shandong Gold and Guangdong HongDa
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By analyzing existing cross correlation between Shandong Gold Mining and Guangdong HongDa Blasting, you can compare the effects of market volatilities on Shandong Gold and Guangdong HongDa 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 Guangdong HongDa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Gold and Guangdong HongDa.
Diversification Opportunities for Shandong Gold and Guangdong HongDa
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shandong and Guangdong is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Gold Mining and Guangdong HongDa Blasting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong HongDa Blasting 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 Guangdong HongDa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong HongDa Blasting has no effect on the direction of Shandong Gold i.e., Shandong Gold and Guangdong HongDa go up and down completely randomly.
Pair Corralation between Shandong Gold and Guangdong HongDa
Assuming the 90 days trading horizon Shandong Gold Mining is expected to generate 1.41 times more return on investment than Guangdong HongDa. However, Shandong Gold is 1.41 times more volatile than Guangdong HongDa Blasting. It trades about -0.02 of its potential returns per unit of risk. Guangdong HongDa Blasting is currently generating about -0.19 per unit of risk. If you would invest 2,433 in Shandong Gold Mining on November 28, 2024 and sell it today you would lose (22.00) from holding Shandong Gold Mining or give up 0.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Gold Mining vs. Guangdong HongDa Blasting
Performance |
| Timeline |
| Shandong Gold Mining |
| Guangdong HongDa Blasting |
Shandong Gold and Guangdong HongDa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Gold and Guangdong HongDa
The main advantage of trading using opposite Shandong Gold and Guangdong HongDa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Gold position performs unexpectedly, Guangdong HongDa 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 Guangdong HongDa will offset losses from the drop in Guangdong HongDa's long position.| Shandong Gold vs. Jiangsu Yueda Investment | Shandong Gold vs. Western Mining Co | Shandong Gold vs. Tianjin Silvery Dragon | Shandong Gold vs. Tibet Huayu Mining |
| Guangdong HongDa vs. Linewell Software Co | Guangdong HongDa vs. ROPEOK Technology Group | Guangdong HongDa vs. Guotai Epoint Software | Guangdong HongDa vs. Tianjin Ruixin Technology |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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