Correlation Between Xinjiang Baodi and Shengda Mining
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By analyzing existing cross correlation between Xinjiang Baodi Mining and Shengda Mining Co, you can compare the effects of market volatilities on Xinjiang Baodi 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 Xinjiang Baodi with a short position of Shengda Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Baodi and Shengda Mining.
Diversification Opportunities for Xinjiang Baodi and Shengda Mining
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xinjiang and Shengda is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Baodi Mining and Shengda Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shengda Mining and Xinjiang Baodi 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 Xinjiang Baodi Mining 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 Xinjiang Baodi i.e., Xinjiang Baodi and Shengda Mining go up and down completely randomly.
Pair Corralation between Xinjiang Baodi and Shengda Mining
Assuming the 90 days trading horizon Xinjiang Baodi Mining is expected to under-perform the Shengda Mining. In addition to that, Xinjiang Baodi is 1.14 times more volatile than Shengda Mining Co. It trades about -0.19 of its total potential returns per unit of risk. Shengda Mining Co is currently generating about 0.42 per unit of volatility. If you would invest 1,207 in Shengda Mining Co on November 7, 2024 and sell it today you would earn a total of 177.00 from holding Shengda Mining Co or generate 14.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Baodi Mining vs. Shengda Mining Co
Performance |
| Timeline |
| Xinjiang Baodi Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shengda Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Xinjiang Baodi and Shengda Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Baodi and Shengda Mining
The main advantage of trading using opposite Xinjiang Baodi and Shengda Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Baodi 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.The idea behind Xinjiang Baodi Mining and Shengda Mining Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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