Correlation Between Huaibei Mining and Shandong Mining
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By analyzing existing cross correlation between Huaibei Mining Holdings and Shandong Mining Machinery, you can compare the effects of market volatilities on Huaibei Mining and Shandong 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 Huaibei Mining with a short position of Shandong Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huaibei Mining and Shandong Mining.
Diversification Opportunities for Huaibei Mining and Shandong Mining
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Huaibei and Shandong is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Huaibei Mining Holdings and Shandong Mining Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Mining Machinery and Huaibei 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 Huaibei Mining Holdings are associated (or correlated) with Shandong Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Mining Machinery has no effect on the direction of Huaibei Mining i.e., Huaibei Mining and Shandong Mining go up and down completely randomly.
Pair Corralation between Huaibei Mining and Shandong Mining
Assuming the 90 days trading horizon Huaibei Mining Holdings is expected to under-perform the Shandong Mining. But the stock apears to be less risky and, when comparing its historical volatility, Huaibei Mining Holdings is 2.68 times less risky than Shandong Mining. The stock trades about -0.23 of its potential returns per unit of risk. The Shandong Mining Machinery is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 271.00 in Shandong Mining Machinery on August 31, 2024 and sell it today you would earn a total of 56.00 from holding Shandong Mining Machinery or generate 20.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huaibei Mining Holdings vs. Shandong Mining Machinery
Performance |
| Timeline |
| Huaibei Mining Holdings |
| Shandong Mining Machinery |
Huaibei Mining and Shandong Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huaibei Mining and Shandong Mining
The main advantage of trading using opposite Huaibei Mining and Shandong Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huaibei Mining position performs unexpectedly, Shandong 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 Shandong Mining will offset losses from the drop in Shandong Mining's long position.| Huaibei Mining vs. Zijin Mining Group | Huaibei Mining vs. Baoshan Iron Steel | Huaibei Mining vs. Rongsheng Petrochemical Co | Huaibei Mining vs. Hoshine Silicon Ind |
| Shandong Mining vs. Cultural Investment Holdings | Shandong Mining vs. Gome Telecom Equipment | Shandong Mining vs. Bus Online Co | Shandong Mining vs. Holitech 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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