Correlation Between Industrial Securities and Shandong Mining
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By analyzing existing cross correlation between Industrial Securities Co and Shandong Mining Machinery, you can compare the effects of market volatilities on Industrial Securities 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 Industrial Securities with a short position of Shandong Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Securities and Shandong Mining.
Diversification Opportunities for Industrial Securities and Shandong Mining
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Industrial and Shandong is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Securities Co 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 Industrial Securities 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 Industrial Securities Co 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 Industrial Securities i.e., Industrial Securities and Shandong Mining go up and down completely randomly.
Pair Corralation between Industrial Securities and Shandong Mining
Assuming the 90 days trading horizon Industrial Securities is expected to generate 35.76 times less return on investment than Shandong Mining. But when comparing it to its historical volatility, Industrial Securities Co is 1.84 times less risky than Shandong Mining. It trades about 0.02 of its potential returns per unit of risk. Shandong Mining Machinery is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 267.00 in Shandong Mining Machinery on September 2, 2024 and sell it today you would earn a total of 93.00 from holding Shandong Mining Machinery or generate 34.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Securities Co vs. Shandong Mining Machinery
Performance |
| Timeline |
| Industrial Securities |
| Shandong Mining Machinery |
Industrial Securities and Shandong Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Securities and Shandong Mining
The main advantage of trading using opposite Industrial Securities and Shandong Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Securities 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.| Industrial Securities vs. BeiGene | Industrial Securities vs. Kweichow Moutai Co | Industrial Securities vs. Beijing Roborock Technology | Industrial Securities vs. G bits Network Technology |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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