Correlation Between Shandong Gold and Zhejiang Zhengguang
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By analyzing existing cross correlation between Shandong Gold Mining and Zhejiang Zhengguang Industrial, you can compare the effects of market volatilities on Shandong Gold and Zhejiang Zhengguang 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 Zhejiang Zhengguang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Gold and Zhejiang Zhengguang.
Diversification Opportunities for Shandong Gold and Zhejiang Zhengguang
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shandong and Zhejiang is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Gold Mining and Zhejiang Zhengguang Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Zhengguang 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 Zhejiang Zhengguang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Zhengguang has no effect on the direction of Shandong Gold i.e., Shandong Gold and Zhejiang Zhengguang go up and down completely randomly.
Pair Corralation between Shandong Gold and Zhejiang Zhengguang
Assuming the 90 days trading horizon Shandong Gold Mining is expected to under-perform the Zhejiang Zhengguang. But the stock apears to be less risky and, when comparing its historical volatility, Shandong Gold Mining is 1.46 times less risky than Zhejiang Zhengguang. The stock trades about -0.05 of its potential returns per unit of risk. The Zhejiang Zhengguang Industrial is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,737 in Zhejiang Zhengguang Industrial on September 3, 2024 and sell it today you would lose (241.00) from holding Zhejiang Zhengguang Industrial or give up 8.81% 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. Zhejiang Zhengguang Industrial
Performance |
| Timeline |
| Shandong Gold Mining |
| Zhejiang Zhengguang |
Shandong Gold and Zhejiang Zhengguang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Gold and Zhejiang Zhengguang
The main advantage of trading using opposite Shandong Gold and Zhejiang Zhengguang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Gold position performs unexpectedly, Zhejiang Zhengguang 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 Zhejiang Zhengguang will offset losses from the drop in Zhejiang Zhengguang's long position.| Shandong Gold vs. Hubeiyichang Transportation Group | Shandong Gold vs. Zhongtong Guomai Communication | Shandong Gold vs. Jilin Jlu Communication | Shandong Gold vs. Xinjiang Communications Construction |
| Zhejiang Zhengguang vs. Zijin Mining Group | Zhejiang Zhengguang vs. Baoshan Iron Steel | Zhejiang Zhengguang vs. Rongsheng Petrochemical Co | Zhejiang Zhengguang vs. Hoshine Silicon Ind |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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