Correlation Between Changchun Engley and Shengda Mining
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By analyzing existing cross correlation between Changchun Engley Automobile and Shengda Mining Co, you can compare the effects of market volatilities on Changchun Engley 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 Changchun Engley with a short position of Shengda Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Engley and Shengda Mining.
Diversification Opportunities for Changchun Engley and Shengda Mining
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changchun and Shengda is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Engley Automobile and Shengda Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shengda Mining and Changchun Engley 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 Changchun Engley Automobile 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 Changchun Engley i.e., Changchun Engley and Shengda Mining go up and down completely randomly.
Pair Corralation between Changchun Engley and Shengda Mining
Assuming the 90 days trading horizon Changchun Engley is expected to generate 68.44 times less return on investment than Shengda Mining. But when comparing it to its historical volatility, Changchun Engley Automobile is 1.23 times less risky than Shengda Mining. It trades about 0.0 of its potential returns per unit of risk. Shengda Mining Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,272 in Shengda Mining Co on September 12, 2024 and sell it today you would earn a total of 55.00 from holding Shengda Mining Co or generate 4.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Changchun Engley Automobile vs. Shengda Mining Co
Performance |
| Timeline |
| Changchun Engley Aut |
| Shengda Mining |
Changchun Engley and Shengda Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Engley and Shengda Mining
The main advantage of trading using opposite Changchun Engley and Shengda Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Engley 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.| Changchun Engley vs. Changchun Faway Automobile | Changchun Engley vs. Guangzhou Haige Communications | Changchun Engley vs. China Railway Materials | Changchun Engley vs. Advanced Technology Materials |
| Shengda Mining vs. Zijin Mining Group | Shengda Mining vs. Wanhua Chemical Group | Shengda Mining vs. Baoshan Iron Steel | Shengda 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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