Correlation Between Shandong Mining and Henan Lantian
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By analyzing existing cross correlation between Shandong Mining Machinery and Henan Lantian Gas, you can compare the effects of market volatilities on Shandong Mining and Henan Lantian 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 Henan Lantian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and Henan Lantian.
Diversification Opportunities for Shandong Mining and Henan Lantian
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shandong and Henan is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and Henan Lantian Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henan Lantian Gas 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 Henan Lantian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henan Lantian Gas has no effect on the direction of Shandong Mining i.e., Shandong Mining and Henan Lantian go up and down completely randomly.
Pair Corralation between Shandong Mining and Henan Lantian
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 2.26 times more return on investment than Henan Lantian. However, Shandong Mining is 2.26 times more volatile than Henan Lantian Gas. It trades about 0.32 of its potential returns per unit of risk. Henan Lantian Gas is currently generating about -0.04 per unit of risk. If you would invest 211.00 in Shandong Mining Machinery on September 12, 2024 and sell it today you would earn a total of 297.00 from holding Shandong Mining Machinery or generate 140.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Shandong Mining Machinery vs. Henan Lantian Gas
Performance |
Timeline |
Shandong Mining Machinery |
Henan Lantian Gas |
Shandong Mining and Henan Lantian Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shandong Mining and Henan Lantian
The main advantage of trading using opposite Shandong Mining and Henan Lantian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, Henan Lantian 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 Henan Lantian will offset losses from the drop in Henan Lantian'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 |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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