Correlation Between Xinjiang Baodi and Shandong Mining
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By analyzing existing cross correlation between Xinjiang Baodi Mining and Shandong Mining Machinery, you can compare the effects of market volatilities on Xinjiang Baodi 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 Xinjiang Baodi with a short position of Shandong Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Baodi and Shandong Mining.
Diversification Opportunities for Xinjiang Baodi and Shandong Mining
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xinjiang and Shandong is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Baodi Mining 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 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 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 Xinjiang Baodi i.e., Xinjiang Baodi and Shandong Mining go up and down completely randomly.
Pair Corralation between Xinjiang Baodi and Shandong Mining
Assuming the 90 days trading horizon Xinjiang Baodi is expected to generate 14.59 times less return on investment than Shandong Mining. But when comparing it to its historical volatility, Xinjiang Baodi Mining is 1.18 times less risky than Shandong Mining. It trades about 0.0 of its potential returns per unit of risk. Shandong Mining Machinery is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 253.00 in Shandong Mining Machinery on August 25, 2024 and sell it today you would earn a total of 15.00 from holding Shandong Mining Machinery or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Baodi Mining vs. Shandong Mining Machinery
Performance |
| Timeline |
| Xinjiang Baodi Mining |
| Shandong Mining Machinery |
Xinjiang Baodi and Shandong Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Baodi and Shandong Mining
The main advantage of trading using opposite Xinjiang Baodi and Shandong Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Baodi 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.| Xinjiang Baodi vs. Zijin Mining Group | Xinjiang Baodi vs. Wanhua Chemical Group | Xinjiang Baodi vs. Baoshan Iron Steel | Xinjiang Baodi vs. Shandong Gold Mining |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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