Correlation Between Shandong Gold and Hubei Dinglong
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By analyzing existing cross correlation between Shandong Gold Mining and Hubei Dinglong Chemical, you can compare the effects of market volatilities on Shandong Gold and Hubei Dinglong 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 Hubei Dinglong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Gold and Hubei Dinglong.
Diversification Opportunities for Shandong Gold and Hubei Dinglong
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shandong and Hubei is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Gold Mining and Hubei Dinglong Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Dinglong Chemical 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 Hubei Dinglong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Dinglong Chemical has no effect on the direction of Shandong Gold i.e., Shandong Gold and Hubei Dinglong go up and down completely randomly.
Pair Corralation between Shandong Gold and Hubei Dinglong
Assuming the 90 days trading horizon Shandong Gold Mining is expected to under-perform the Hubei Dinglong. But the stock apears to be less risky and, when comparing its historical volatility, Shandong Gold Mining is 1.9 times less risky than Hubei Dinglong. The stock trades about -0.1 of its potential returns per unit of risk. The Hubei Dinglong Chemical is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,931 in Hubei Dinglong Chemical on August 29, 2024 and sell it today you would earn a total of 728.00 from holding Hubei Dinglong Chemical or generate 37.7% 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. Hubei Dinglong Chemical
Performance |
| Timeline |
| Shandong Gold Mining |
| Hubei Dinglong Chemical |
Shandong Gold and Hubei Dinglong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Gold and Hubei Dinglong
The main advantage of trading using opposite Shandong Gold and Hubei Dinglong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Gold position performs unexpectedly, Hubei Dinglong 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 Hubei Dinglong will offset losses from the drop in Hubei Dinglong's long position.| Shandong Gold vs. Success Electronics | Shandong Gold vs. Sichuan Teway Food | Shandong Gold vs. Fuzhou Rockchip Electronics | Shandong Gold vs. Techshine Electronics Co |
| Hubei Dinglong vs. Zijin Mining Group | Hubei Dinglong vs. Baoshan Iron Steel | Hubei Dinglong vs. Shandong Gold Mining | Hubei Dinglong 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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