Correlation Between Shandong Gold and Red Avenue
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By analyzing existing cross correlation between Shandong Gold Mining and Red Avenue New, you can compare the effects of market volatilities on Shandong Gold and Red Avenue 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 Red Avenue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Gold and Red Avenue.
Diversification Opportunities for Shandong Gold and Red Avenue
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shandong and Red is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Gold Mining and Red Avenue New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Avenue New 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 Red Avenue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Avenue New has no effect on the direction of Shandong Gold i.e., Shandong Gold and Red Avenue go up and down completely randomly.
Pair Corralation between Shandong Gold and Red Avenue
Assuming the 90 days trading horizon Shandong Gold Mining is expected to under-perform the Red Avenue. But the stock apears to be less risky and, when comparing its historical volatility, Shandong Gold Mining is 2.69 times less risky than Red Avenue. The stock trades about -0.36 of its potential returns per unit of risk. The Red Avenue New is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,315 in Red Avenue New on August 27, 2024 and sell it today you would earn a total of 105.00 from holding Red Avenue New or generate 3.17% 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. Red Avenue New
Performance |
| Timeline |
| Shandong Gold Mining |
| Red Avenue New |
Shandong Gold and Red Avenue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Gold and Red Avenue
The main advantage of trading using opposite Shandong Gold and Red Avenue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Gold position performs unexpectedly, Red Avenue 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 Red Avenue will offset losses from the drop in Red Avenue's long position.| Shandong Gold vs. Luyin Investment Group | Shandong Gold vs. Sichuan Fulin Transportation | Shandong Gold vs. Zhejiang Kingland Pipeline | Shandong Gold vs. Zoje Resources Investment |
| Red Avenue vs. Sunwave Communications Co | Red Avenue vs. Guangzhou Haige Communications | Red Avenue vs. Heilongjiang Publishing Media | Red Avenue vs. Zhejiang Publishing Media |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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