Correlation Between ADAMA and Shanghai Lingyun
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By analyzing existing cross correlation between ADAMA and Shanghai Lingyun Industries, you can compare the effects of market volatilities on ADAMA and Shanghai Lingyun 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 ADAMA with a short position of Shanghai Lingyun. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADAMA and Shanghai Lingyun.
Diversification Opportunities for ADAMA and Shanghai Lingyun
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ADAMA and Shanghai is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding ADAMA and Shanghai Lingyun Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Lingyun Ind and ADAMA 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 ADAMA are associated (or correlated) with Shanghai Lingyun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Lingyun Ind has no effect on the direction of ADAMA i.e., ADAMA and Shanghai Lingyun go up and down completely randomly.
Pair Corralation between ADAMA and Shanghai Lingyun
Assuming the 90 days trading horizon ADAMA is expected to generate 1.01 times more return on investment than Shanghai Lingyun. However, ADAMA is 1.01 times more volatile than Shanghai Lingyun Industries. It trades about 0.11 of its potential returns per unit of risk. Shanghai Lingyun Industries is currently generating about 0.07 per unit of risk. If you would invest 562.00 in ADAMA on August 30, 2024 and sell it today you would earn a total of 102.00 from holding ADAMA or generate 18.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADAMA vs. Shanghai Lingyun Industries
Performance |
| Timeline |
| ADAMA |
| Shanghai Lingyun Ind |
ADAMA and Shanghai Lingyun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADAMA and Shanghai Lingyun
The main advantage of trading using opposite ADAMA and Shanghai Lingyun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADAMA position performs unexpectedly, Shanghai Lingyun 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 Shanghai Lingyun will offset losses from the drop in Shanghai Lingyun's long position.| ADAMA vs. Zijin Mining Group | ADAMA vs. Wanhua Chemical Group | ADAMA vs. Baoshan Iron Steel | ADAMA vs. Shandong Gold Mining |
| Shanghai Lingyun vs. Sinosteel Engineering and | Shanghai Lingyun vs. Jiangxi JDL Environmental | Shanghai Lingyun vs. Guangdong Liantai Environmental | Shanghai Lingyun vs. Tianjin Capital Environmental |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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