Correlation Between Shandong Gold and Shanghai Phichem
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By analyzing existing cross correlation between Shandong Gold Mining and Shanghai Phichem Material, you can compare the effects of market volatilities on Shandong Gold and Shanghai Phichem 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 Shanghai Phichem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Gold and Shanghai Phichem.
Diversification Opportunities for Shandong Gold and Shanghai Phichem
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shandong and Shanghai is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Gold Mining and Shanghai Phichem Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Phichem Material 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 Shanghai Phichem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Phichem Material has no effect on the direction of Shandong Gold i.e., Shandong Gold and Shanghai Phichem go up and down completely randomly.
Pair Corralation between Shandong Gold and Shanghai Phichem
Assuming the 90 days trading horizon Shandong Gold Mining is expected to generate 0.58 times more return on investment than Shanghai Phichem. However, Shandong Gold Mining is 1.72 times less risky than Shanghai Phichem. It trades about 0.03 of its potential returns per unit of risk. Shanghai Phichem Material is currently generating about 0.01 per unit of risk. If you would invest 1,990 in Shandong Gold Mining on October 25, 2024 and sell it today you would earn a total of 509.00 from holding Shandong Gold Mining or generate 25.58% 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. Shanghai Phichem Material
Performance |
| Timeline |
| Shandong Gold Mining |
| Shanghai Phichem Material |
Shandong Gold and Shanghai Phichem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Gold and Shanghai Phichem
The main advantage of trading using opposite Shandong Gold and Shanghai Phichem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Gold position performs unexpectedly, Shanghai Phichem 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 Shanghai Phichem will offset losses from the drop in Shanghai Phichem's long position.| Shandong Gold vs. JS Corrugating Machinery | Shandong Gold vs. China Aluminum International | Shandong Gold vs. Jiaozuo Wanfang Aluminum | Shandong Gold vs. Eastern Air Logistics |
| Shanghai Phichem vs. Lecron Energy Saving | Shanghai Phichem vs. HeNan Splendor Science | Shanghai Phichem vs. Industrial Bank Co | Shanghai Phichem vs. Guosheng Financial Holding |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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