Correlation Between Shandong Sinoglory and China Nonferrous
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By analyzing existing cross correlation between Shandong Sinoglory Health and China Nonferrous Metal, you can compare the effects of market volatilities on Shandong Sinoglory and China Nonferrous 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 Shandong Sinoglory with a short position of China Nonferrous. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Sinoglory and China Nonferrous.
Diversification Opportunities for Shandong Sinoglory and China Nonferrous
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and China is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Sinoglory Health and China Nonferrous Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Nonferrous Metal and Shandong Sinoglory 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 Shandong Sinoglory Health are associated (or correlated) with China Nonferrous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Nonferrous Metal has no effect on the direction of Shandong Sinoglory i.e., Shandong Sinoglory and China Nonferrous go up and down completely randomly.
Pair Corralation between Shandong Sinoglory and China Nonferrous
Assuming the 90 days trading horizon Shandong Sinoglory Health is expected to under-perform the China Nonferrous. In addition to that, Shandong Sinoglory is 1.04 times more volatile than China Nonferrous Metal. It trades about -0.03 of its total potential returns per unit of risk. China Nonferrous Metal is currently generating about -0.01 per unit of volatility. If you would invest 582.00 in China Nonferrous Metal on October 16, 2024 and sell it today you would lose (97.00) from holding China Nonferrous Metal or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Sinoglory Health vs. China Nonferrous Metal
Performance |
| Timeline |
| Shandong Sinoglory Health |
| China Nonferrous Metal |
Shandong Sinoglory and China Nonferrous Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Sinoglory and China Nonferrous
The main advantage of trading using opposite Shandong Sinoglory and China Nonferrous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Sinoglory position performs unexpectedly, China Nonferrous 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 China Nonferrous will offset losses from the drop in China Nonferrous' long position.The idea behind Shandong Sinoglory Health and China Nonferrous Metal 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.
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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