Correlation Between Yueyang Xingchang and Shandong Iron
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By analyzing existing cross correlation between Yueyang Xingchang Petro Chemical and Shandong Iron and, you can compare the effects of market volatilities on Yueyang Xingchang and Shandong Iron 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 Yueyang Xingchang with a short position of Shandong Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yueyang Xingchang and Shandong Iron.
Diversification Opportunities for Yueyang Xingchang and Shandong Iron
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yueyang and Shandong is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Yueyang Xingchang Petro Chemic and Shandong Iron and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Iron and Yueyang Xingchang 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 Yueyang Xingchang Petro Chemical are associated (or correlated) with Shandong Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Iron has no effect on the direction of Yueyang Xingchang i.e., Yueyang Xingchang and Shandong Iron go up and down completely randomly.
Pair Corralation between Yueyang Xingchang and Shandong Iron
Assuming the 90 days trading horizon Yueyang Xingchang is expected to generate 1.26 times less return on investment than Shandong Iron. In addition to that, Yueyang Xingchang is 1.35 times more volatile than Shandong Iron and. It trades about 0.05 of its total potential returns per unit of risk. Shandong Iron and is currently generating about 0.08 per unit of volatility. If you would invest 138.00 in Shandong Iron and on November 6, 2024 and sell it today you would earn a total of 3.00 from holding Shandong Iron and or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yueyang Xingchang Petro Chemic vs. Shandong Iron and
Performance |
| Timeline |
| Yueyang Xingchang Petro |
| Shandong Iron |
Yueyang Xingchang and Shandong Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yueyang Xingchang and Shandong Iron
The main advantage of trading using opposite Yueyang Xingchang and Shandong Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yueyang Xingchang position performs unexpectedly, Shandong Iron 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 Shandong Iron will offset losses from the drop in Shandong Iron's long position.The idea behind Yueyang Xingchang Petro Chemical and Shandong Iron and pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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