Correlation Between Chengtun Mining and Shaanxi Construction
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By analyzing existing cross correlation between Chengtun Mining Group and Shaanxi Construction Machinery, you can compare the effects of market volatilities on Chengtun Mining and Shaanxi Construction 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 Chengtun Mining with a short position of Shaanxi Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengtun Mining and Shaanxi Construction.
Diversification Opportunities for Chengtun Mining and Shaanxi Construction
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chengtun and Shaanxi is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Chengtun Mining Group and Shaanxi Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Construction and Chengtun Mining 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 Chengtun Mining Group are associated (or correlated) with Shaanxi Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Construction has no effect on the direction of Chengtun Mining i.e., Chengtun Mining and Shaanxi Construction go up and down completely randomly.
Pair Corralation between Chengtun Mining and Shaanxi Construction
Assuming the 90 days trading horizon Chengtun Mining Group is expected to generate 0.79 times more return on investment than Shaanxi Construction. However, Chengtun Mining Group is 1.26 times less risky than Shaanxi Construction. It trades about 0.0 of its potential returns per unit of risk. Shaanxi Construction Machinery is currently generating about -0.02 per unit of risk. If you would invest 589.00 in Chengtun Mining Group on September 12, 2024 and sell it today you would lose (98.00) from holding Chengtun Mining Group or give up 16.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengtun Mining Group vs. Shaanxi Construction Machinery
Performance |
| Timeline |
| Chengtun Mining Group |
| Shaanxi Construction |
Chengtun Mining and Shaanxi Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengtun Mining and Shaanxi Construction
The main advantage of trading using opposite Chengtun Mining and Shaanxi Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengtun Mining position performs unexpectedly, Shaanxi Construction 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 Shaanxi Construction will offset losses from the drop in Shaanxi Construction's long position.| Chengtun Mining vs. Zijin Mining Group | Chengtun Mining vs. Wanhua Chemical Group | Chengtun Mining vs. Baoshan Iron Steel | Chengtun Mining vs. Rongsheng Petrochemical 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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