Correlation Between Shandong Gold and Zhejiang Yongjin
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By analyzing existing cross correlation between Shandong Gold Mining and Zhejiang Yongjin Metal, you can compare the effects of market volatilities on Shandong Gold and Zhejiang Yongjin 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 Gold with a short position of Zhejiang Yongjin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Gold and Zhejiang Yongjin.
Diversification Opportunities for Shandong Gold and Zhejiang Yongjin
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shandong and Zhejiang is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Gold Mining and Zhejiang Yongjin Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Yongjin Metal and Shandong Gold 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 Gold Mining are associated (or correlated) with Zhejiang Yongjin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Yongjin Metal has no effect on the direction of Shandong Gold i.e., Shandong Gold and Zhejiang Yongjin go up and down completely randomly.
Pair Corralation between Shandong Gold and Zhejiang Yongjin
Assuming the 90 days trading horizon Shandong Gold Mining is expected to under-perform the Zhejiang Yongjin. But the stock apears to be less risky and, when comparing its historical volatility, Shandong Gold Mining is 1.25 times less risky than Zhejiang Yongjin. The stock trades about -0.19 of its potential returns per unit of risk. The Zhejiang Yongjin Metal is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,933 in Zhejiang Yongjin Metal on October 22, 2024 and sell it today you would lose (90.00) from holding Zhejiang Yongjin Metal or give up 4.66% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.46% |
Values | Daily Returns |
Shandong Gold Mining vs. Zhejiang Yongjin Metal
Performance |
Timeline |
Shandong Gold Mining |
Zhejiang Yongjin Metal |
Shandong Gold and Zhejiang Yongjin Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shandong Gold and Zhejiang Yongjin
The main advantage of trading using opposite Shandong Gold and Zhejiang Yongjin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Gold position performs unexpectedly, Zhejiang Yongjin 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 Yongjin will offset losses from the drop in Zhejiang Yongjin's long position.Shandong Gold vs. Henan Shuanghui Investment | Shandong Gold vs. Xiandai Investment Co | Shandong Gold vs. Metro Investment Development | Shandong Gold vs. Shenzhen Centralcon Investment |
Zhejiang Yongjin vs. Bangyan Technology Co | Zhejiang Yongjin vs. Uxi Unicomp Technology | Zhejiang Yongjin vs. Shenzhen SDG Information | Zhejiang Yongjin vs. Invengo Information Technology |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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