Correlation Between Shandong Mining and Jiaozuo Wanfang
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By analyzing existing cross correlation between Shandong Mining Machinery and Jiaozuo Wanfang Aluminum, you can compare the effects of market volatilities on Shandong Mining and Jiaozuo Wanfang 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 Mining with a short position of Jiaozuo Wanfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and Jiaozuo Wanfang.
Diversification Opportunities for Shandong Mining and Jiaozuo Wanfang
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shandong and Jiaozuo is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and Jiaozuo Wanfang Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiaozuo Wanfang Aluminum and Shandong Mining 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 Mining Machinery are associated (or correlated) with Jiaozuo Wanfang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiaozuo Wanfang Aluminum has no effect on the direction of Shandong Mining i.e., Shandong Mining and Jiaozuo Wanfang go up and down completely randomly.
Pair Corralation between Shandong Mining and Jiaozuo Wanfang
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 1.27 times more return on investment than Jiaozuo Wanfang. However, Shandong Mining is 1.27 times more volatile than Jiaozuo Wanfang Aluminum. It trades about 0.4 of its potential returns per unit of risk. Jiaozuo Wanfang Aluminum is currently generating about 0.16 per unit of risk. If you would invest 211.00 in Shandong Mining Machinery on September 8, 2024 and sell it today you would earn a total of 370.00 from holding Shandong Mining Machinery or generate 175.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Shandong Mining Machinery vs. Jiaozuo Wanfang Aluminum
Performance |
Timeline |
Shandong Mining Machinery |
Jiaozuo Wanfang Aluminum |
Shandong Mining and Jiaozuo Wanfang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shandong Mining and Jiaozuo Wanfang
The main advantage of trading using opposite Shandong Mining and Jiaozuo Wanfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, Jiaozuo Wanfang 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 Jiaozuo Wanfang will offset losses from the drop in Jiaozuo Wanfang's long position.Shandong Mining vs. Bank of China | Shandong Mining vs. Kweichow Moutai Co | Shandong Mining vs. PetroChina Co Ltd | Shandong Mining vs. Bank of Communications |
Jiaozuo Wanfang vs. Zijin Mining Group | Jiaozuo Wanfang vs. Wanhua Chemical Group | Jiaozuo Wanfang vs. Baoshan Iron Steel | Jiaozuo Wanfang vs. Shandong Gold 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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