Correlation Between Hunan Valin and Shanghai Yanpu
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By analyzing existing cross correlation between Hunan Valin Steel and Shanghai Yanpu Metal, you can compare the effects of market volatilities on Hunan Valin 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 Hunan Valin with a short position of Shanghai Yanpu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Valin and Shanghai Yanpu.
Diversification Opportunities for Hunan Valin and Shanghai Yanpu
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hunan and Shanghai is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Valin Steel 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 Hunan Valin 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 Hunan Valin Steel 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 Hunan Valin i.e., Hunan Valin and Shanghai Yanpu go up and down completely randomly.
Pair Corralation between Hunan Valin and Shanghai Yanpu
Assuming the 90 days trading horizon Hunan Valin is expected to generate 1.64 times less return on investment than Shanghai Yanpu. But when comparing it to its historical volatility, Hunan Valin Steel is 1.48 times less risky than Shanghai Yanpu. It trades about 0.01 of its potential returns per unit of risk. Shanghai Yanpu Metal is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,812 in Shanghai Yanpu Metal on September 4, 2024 and sell it today you would earn a total of 68.00 from holding Shanghai Yanpu Metal or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunan Valin Steel vs. Shanghai Yanpu Metal
Performance |
| Timeline |
| Hunan Valin Steel |
| Shanghai Yanpu Metal |
Hunan Valin and Shanghai Yanpu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Valin and Shanghai Yanpu
The main advantage of trading using opposite Hunan Valin and Shanghai Yanpu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Valin 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.| Hunan Valin vs. Shanghai Yanpu Metal | Hunan Valin vs. Chengtun Mining Group | Hunan Valin vs. Shengda Mining Co | Hunan Valin vs. Nexchip Semiconductor Corp |
| Shanghai Yanpu vs. Dhc Software Co | Shanghai Yanpu vs. Inspur Software Co | Shanghai Yanpu vs. Keda Clean Energy | Shanghai Yanpu vs. Glodon Software Co |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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