Correlation Between Morien Resources and China Shenhua
Can any of the company-specific risk be diversified away by investing in both Morien Resources and China Shenhua at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Morien Resources and China Shenhua into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morien Resources Corp and China Shenhua Energy, you can compare the effects of market volatilities on Morien Resources and China Shenhua 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 Morien Resources with a short position of China Shenhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morien Resources and China Shenhua.
Diversification Opportunities for Morien Resources and China Shenhua
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Morien and China is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Morien Resources Corp and China Shenhua Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Shenhua Energy and Morien Resources 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 Morien Resources Corp are associated (or correlated) with China Shenhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Shenhua Energy has no effect on the direction of Morien Resources i.e., Morien Resources and China Shenhua go up and down completely randomly.
Pair Corralation between Morien Resources and China Shenhua
Assuming the 90 days horizon Morien Resources is expected to generate 19.31 times less return on investment than China Shenhua. In addition to that, Morien Resources is 3.53 times more volatile than China Shenhua Energy. It trades about 0.0 of its total potential returns per unit of risk. China Shenhua Energy is currently generating about 0.07 per unit of volatility. If you would invest 951.00 in China Shenhua Energy on August 30, 2024 and sell it today you would earn a total of 714.00 from holding China Shenhua Energy or generate 75.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.99% |
| Values | Daily Returns |
Morien Resources Corp vs. China Shenhua Energy
Performance |
| Timeline |
| Morien Resources Corp |
| China Shenhua Energy |
Morien Resources and China Shenhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morien Resources and China Shenhua
The main advantage of trading using opposite Morien Resources and China Shenhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morien Resources position performs unexpectedly, China Shenhua 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 Shenhua will offset losses from the drop in China Shenhua's long position.| Morien Resources vs. Adaro Energy Tbk | Morien Resources vs. Alliance Resource Partners | Morien Resources vs. Indo Tambangraya Megah | Morien Resources vs. Yanzhou Coal Mining |
| China Shenhua vs. Adaro Energy Tbk | China Shenhua vs. Bukit Asam Tbk | China Shenhua vs. Indo Tambangraya Megah | China Shenhua vs. Yanzhou Coal Mining |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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