Correlation Between Yantai Changyu and Shanghai Yanpu
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By analyzing existing cross correlation between Yantai Changyu Pioneer and Shanghai Yanpu Metal, you can compare the effects of market volatilities on Yantai Changyu and Shanghai Yanpu 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 Yantai Changyu with a short position of Shanghai Yanpu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yantai Changyu and Shanghai Yanpu.
Diversification Opportunities for Yantai Changyu and Shanghai Yanpu
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Yantai and Shanghai is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Yantai Changyu Pioneer and Shanghai Yanpu Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Yanpu Metal and Yantai Changyu 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 Yantai Changyu Pioneer are associated (or correlated) with Shanghai Yanpu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Yanpu Metal has no effect on the direction of Yantai Changyu i.e., Yantai Changyu and Shanghai Yanpu go up and down completely randomly.
Pair Corralation between Yantai Changyu and Shanghai Yanpu
Assuming the 90 days trading horizon Yantai Changyu is expected to generate 2.62 times less return on investment than Shanghai Yanpu. But when comparing it to its historical volatility, Yantai Changyu Pioneer is 1.35 times less risky than Shanghai Yanpu. It trades about 0.12 of its potential returns per unit of risk. Shanghai Yanpu Metal is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,640 in Shanghai Yanpu Metal on September 3, 2024 and sell it today you would earn a total of 1,398 from holding Shanghai Yanpu Metal or generate 52.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yantai Changyu Pioneer vs. Shanghai Yanpu Metal
Performance |
| Timeline |
| Yantai Changyu Pioneer |
| Shanghai Yanpu Metal |
Yantai Changyu and Shanghai Yanpu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yantai Changyu and Shanghai Yanpu
The main advantage of trading using opposite Yantai Changyu and Shanghai Yanpu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yantai Changyu position performs unexpectedly, Shanghai Yanpu 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 Yanpu will offset losses from the drop in Shanghai Yanpu's long position.| Yantai Changyu vs. Shanghai Yanpu Metal | Yantai Changyu vs. HeNan Splendor Science | Yantai Changyu vs. Ningbo Thermal Power | Yantai Changyu vs. China Nonferrous Metal |
| Shanghai Yanpu vs. PetroChina Co Ltd | Shanghai Yanpu vs. China Mobile Limited | Shanghai Yanpu vs. Industrial and Commercial | Shanghai Yanpu vs. China Life Insurance |
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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