Correlation Between Shandong Gold and China Molybdenum
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By analyzing existing cross correlation between Shandong Gold Mining and China Molybdenum Co, you can compare the effects of market volatilities on Shandong Gold and China Molybdenum 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 China Molybdenum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Gold and China Molybdenum.
Diversification Opportunities for Shandong Gold and China Molybdenum
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and China is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Gold Mining and China Molybdenum Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Molybdenum 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 China Molybdenum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Molybdenum has no effect on the direction of Shandong Gold i.e., Shandong Gold and China Molybdenum go up and down completely randomly.
Pair Corralation between Shandong Gold and China Molybdenum
Assuming the 90 days trading horizon Shandong Gold Mining is expected to generate 0.72 times more return on investment than China Molybdenum. However, Shandong Gold Mining is 1.39 times less risky than China Molybdenum. It trades about 0.0 of its potential returns per unit of risk. China Molybdenum Co is currently generating about -0.05 per unit of risk. If you would invest 2,509 in Shandong Gold Mining on September 14, 2024 and sell it today you would lose (6.00) from holding Shandong Gold Mining or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Gold Mining vs. China Molybdenum Co
Performance |
| Timeline |
| Shandong Gold Mining |
| China Molybdenum |
Shandong Gold and China Molybdenum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Gold and China Molybdenum
The main advantage of trading using opposite Shandong Gold and China Molybdenum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Gold position performs unexpectedly, China Molybdenum 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 China Molybdenum will offset losses from the drop in China Molybdenum's long position.| Shandong Gold vs. Threes Company Media | Shandong Gold vs. Wasu Media Holding | Shandong Gold vs. Oppein Home Group | Shandong Gold vs. Hengdian Entertainment Co |
| China Molybdenum vs. Dongguan Aohai Technology | China Molybdenum vs. Northking Information Technology | China Molybdenum vs. Tibet Huayu Mining | China Molybdenum vs. Jinyu Bio Technology 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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