Correlation Between Dalian Thermal and Shengda Mining
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By analyzing existing cross correlation between Dalian Thermal Power and Shengda Mining Co, you can compare the effects of market volatilities on Dalian Thermal and Shengda Mining 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 Dalian Thermal with a short position of Shengda Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalian Thermal and Shengda Mining.
Diversification Opportunities for Dalian Thermal and Shengda Mining
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dalian and Shengda is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Dalian Thermal Power and Shengda Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shengda Mining and Dalian Thermal 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 Dalian Thermal Power are associated (or correlated) with Shengda Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shengda Mining has no effect on the direction of Dalian Thermal i.e., Dalian Thermal and Shengda Mining go up and down completely randomly.
Pair Corralation between Dalian Thermal and Shengda Mining
Assuming the 90 days trading horizon Dalian Thermal Power is expected to generate 1.69 times more return on investment than Shengda Mining. However, Dalian Thermal is 1.69 times more volatile than Shengda Mining Co. It trades about -0.02 of its potential returns per unit of risk. Shengda Mining Co is currently generating about -0.32 per unit of risk. If you would invest 832.00 in Dalian Thermal Power on August 31, 2024 and sell it today you would lose (27.00) from holding Dalian Thermal Power or give up 3.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dalian Thermal Power vs. Shengda Mining Co
Performance |
| Timeline |
| Dalian Thermal Power |
| Shengda Mining |
Dalian Thermal and Shengda Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dalian Thermal and Shengda Mining
The main advantage of trading using opposite Dalian Thermal and Shengda Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalian Thermal position performs unexpectedly, Shengda Mining 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 Shengda Mining will offset losses from the drop in Shengda Mining's long position.| Dalian Thermal vs. Industrial and Commercial | Dalian Thermal vs. Kweichow Moutai Co | Dalian Thermal vs. Agricultural Bank of | Dalian Thermal vs. China Mobile Limited |
| Shengda Mining vs. Juewei Food Co | Shengda Mining vs. Tianjin Pengling Rubber | Shengda Mining vs. Jiangsu Financial Leasing | Shengda Mining vs. Guangzhou Tinci Materials |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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