Correlation Between Yunnan Aluminium and Shanghai Yaohua
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By analyzing existing cross correlation between Yunnan Aluminium Co and Shanghai Yaohua Pilkington, you can compare the effects of market volatilities on Yunnan Aluminium and Shanghai Yaohua 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 Yunnan Aluminium with a short position of Shanghai Yaohua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunnan Aluminium and Shanghai Yaohua.
Diversification Opportunities for Yunnan Aluminium and Shanghai Yaohua
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Yunnan and Shanghai is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Yunnan Aluminium Co and Shanghai Yaohua Pilkington in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Yaohua Pilk and Yunnan Aluminium 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 Yunnan Aluminium Co are associated (or correlated) with Shanghai Yaohua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Yaohua Pilk has no effect on the direction of Yunnan Aluminium i.e., Yunnan Aluminium and Shanghai Yaohua go up and down completely randomly.
Pair Corralation between Yunnan Aluminium and Shanghai Yaohua
Assuming the 90 days trading horizon Yunnan Aluminium Co is expected to under-perform the Shanghai Yaohua. But the stock apears to be less risky and, when comparing its historical volatility, Yunnan Aluminium Co is 1.37 times less risky than Shanghai Yaohua. The stock trades about -0.12 of its potential returns per unit of risk. The Shanghai Yaohua Pilkington is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 34.00 in Shanghai Yaohua Pilkington on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Shanghai Yaohua Pilkington or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yunnan Aluminium Co vs. Shanghai Yaohua Pilkington
Performance |
| Timeline |
| Yunnan Aluminium |
| Shanghai Yaohua Pilk |
Yunnan Aluminium and Shanghai Yaohua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yunnan Aluminium and Shanghai Yaohua
The main advantage of trading using opposite Yunnan Aluminium and Shanghai Yaohua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunnan Aluminium position performs unexpectedly, Shanghai Yaohua 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 Yaohua will offset losses from the drop in Shanghai Yaohua's long position.| Yunnan Aluminium vs. Wanhua Chemical Group | Yunnan Aluminium vs. Baoshan Iron Steel | Yunnan Aluminium vs. Rongsheng Petrochemical Co | Yunnan Aluminium vs. Hoshine Silicon Ind |
| Shanghai Yaohua vs. Zijin Mining Group | Shanghai Yaohua vs. Wanhua Chemical Group | Shanghai Yaohua vs. Baoshan Iron Steel | Shanghai Yaohua 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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