Correlation Between Shandong Mining and Zhejiang Daily
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By analyzing existing cross correlation between Shandong Mining Machinery and Zhejiang Daily Media, you can compare the effects of market volatilities on Shandong Mining and Zhejiang Daily 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 Zhejiang Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and Zhejiang Daily.
Diversification Opportunities for Shandong Mining and Zhejiang Daily
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shandong and Zhejiang is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and Zhejiang Daily Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Daily Media 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 Zhejiang Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Daily Media has no effect on the direction of Shandong Mining i.e., Shandong Mining and Zhejiang Daily go up and down completely randomly.
Pair Corralation between Shandong Mining and Zhejiang Daily
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 1.21 times more return on investment than Zhejiang Daily. However, Shandong Mining is 1.21 times more volatile than Zhejiang Daily Media. It trades about 0.04 of its potential returns per unit of risk. Zhejiang Daily Media is currently generating about -0.03 per unit of risk. If you would invest 268.00 in Shandong Mining Machinery on October 4, 2024 and sell it today you would earn a total of 81.00 from holding Shandong Mining Machinery or generate 30.22% 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. Zhejiang Daily Media
Performance |
Timeline |
Shandong Mining Machinery |
Zhejiang Daily Media |
Shandong Mining and Zhejiang Daily Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shandong Mining and Zhejiang Daily
The main advantage of trading using opposite Shandong Mining and Zhejiang Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining position performs unexpectedly, Zhejiang Daily 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 Zhejiang Daily will offset losses from the drop in Zhejiang Daily'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 |
Zhejiang Daily vs. CITIC Metal Co | Zhejiang Daily vs. Western Metal Materials | Zhejiang Daily vs. Pengxin International Mining | Zhejiang Daily vs. Chengtun Mining Group |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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