Correlation Between Shandong Gold and Tibet Huayu
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By analyzing existing cross correlation between Shandong Gold Mining and Tibet Huayu Mining, you can compare the effects of market volatilities on Shandong Gold and Tibet Huayu 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 Tibet Huayu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Gold and Tibet Huayu.
Diversification Opportunities for Shandong Gold and Tibet Huayu
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shandong and Tibet is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Gold Mining and Tibet Huayu Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tibet Huayu Mining 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 Tibet Huayu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tibet Huayu Mining has no effect on the direction of Shandong Gold i.e., Shandong Gold and Tibet Huayu go up and down completely randomly.
Pair Corralation between Shandong Gold and Tibet Huayu
Assuming the 90 days trading horizon Shandong Gold Mining is expected to under-perform the Tibet Huayu. But the stock apears to be less risky and, when comparing its historical volatility, Shandong Gold Mining is 3.44 times less risky than Tibet Huayu. The stock trades about -0.37 of its potential returns per unit of risk. The Tibet Huayu Mining is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,278 in Tibet Huayu Mining on August 31, 2024 and sell it today you would earn a total of 141.00 from holding Tibet Huayu Mining or generate 11.03% 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. Tibet Huayu Mining
Performance |
| Timeline |
| Shandong Gold Mining |
| Tibet Huayu Mining |
Shandong Gold and Tibet Huayu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Gold and Tibet Huayu
The main advantage of trading using opposite Shandong Gold and Tibet Huayu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Gold position performs unexpectedly, Tibet Huayu 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 Tibet Huayu will offset losses from the drop in Tibet Huayu's long position.| Shandong Gold vs. Qijing Machinery | Shandong Gold vs. Rising Nonferrous Metals | Shandong Gold vs. Henzhen Zhaowei Machinery | Shandong Gold vs. Gifore Agricultural Machinery |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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