Correlation Between Shandong Mining and Xinjiang Baodi
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By analyzing existing cross correlation between Shandong Mining Machinery and Xinjiang Baodi Mining, you can compare the effects of market volatilities on Shandong Mining and Xinjiang Baodi 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 Xinjiang Baodi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and Xinjiang Baodi.
Diversification Opportunities for Shandong Mining and Xinjiang Baodi
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Xinjiang is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and Xinjiang Baodi Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Baodi Mining 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 Xinjiang Baodi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Baodi Mining has no effect on the direction of Shandong Mining i.e., Shandong Mining and Xinjiang Baodi go up and down completely randomly.
Pair Corralation between Shandong Mining and Xinjiang Baodi
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 1.86 times more return on investment than Xinjiang Baodi. However, Shandong Mining is 1.86 times more volatile than Xinjiang Baodi Mining. It trades about 0.33 of its potential returns per unit of risk. Xinjiang Baodi Mining is currently generating about 0.18 per unit of risk. If you would invest 208.00 in Shandong Mining Machinery on September 13, 2024 and sell it today you would earn a total of 300.00 from holding Shandong Mining Machinery or generate 144.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Shandong Mining Machinery vs. Xinjiang Baodi Mining
Performance |
Timeline |
Shandong Mining Machinery |
Xinjiang Baodi Mining |
Shandong Mining and Xinjiang Baodi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shandong Mining and Xinjiang Baodi
The main advantage of trading using opposite Shandong Mining and Xinjiang Baodi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, Xinjiang Baodi 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 Xinjiang Baodi will offset losses from the drop in Xinjiang Baodi's long position.Shandong Mining vs. China Petroleum Chemical | Shandong Mining vs. PetroChina Co Ltd | Shandong Mining vs. China State Construction | Shandong Mining vs. China Railway Group |
Xinjiang Baodi vs. Zijin Mining Group | Xinjiang Baodi vs. Wanhua Chemical Group | Xinjiang Baodi vs. Baoshan Iron Steel | Xinjiang Baodi 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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