Correlation Between Shaanxi Energy and Gansu Jiu
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By analyzing existing cross correlation between Shaanxi Energy Investment and Gansu Jiu Steel, you can compare the effects of market volatilities on Shaanxi Energy and Gansu Jiu 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 Shaanxi Energy with a short position of Gansu Jiu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Energy and Gansu Jiu.
Diversification Opportunities for Shaanxi Energy and Gansu Jiu
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shaanxi and Gansu is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Energy Investment and Gansu Jiu Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gansu Jiu Steel and Shaanxi Energy 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 Shaanxi Energy Investment are associated (or correlated) with Gansu Jiu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gansu Jiu Steel has no effect on the direction of Shaanxi Energy i.e., Shaanxi Energy and Gansu Jiu go up and down completely randomly.
Pair Corralation between Shaanxi Energy and Gansu Jiu
Assuming the 90 days trading horizon Shaanxi Energy Investment is expected to under-perform the Gansu Jiu. In addition to that, Shaanxi Energy is 1.05 times more volatile than Gansu Jiu Steel. It trades about -0.03 of its total potential returns per unit of risk. Gansu Jiu Steel is currently generating about 0.01 per unit of volatility. If you would invest 169.00 in Gansu Jiu Steel on September 4, 2024 and sell it today you would earn a total of 5.00 from holding Gansu Jiu Steel or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 84.07% |
| Values | Daily Returns |
Shaanxi Energy Investment vs. Gansu Jiu Steel
Performance |
| Timeline |
| Shaanxi Energy Investment |
| Gansu Jiu Steel |
Shaanxi Energy and Gansu Jiu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Energy and Gansu Jiu
The main advantage of trading using opposite Shaanxi Energy and Gansu Jiu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Energy position performs unexpectedly, Gansu Jiu 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 Gansu Jiu will offset losses from the drop in Gansu Jiu's long position.| Shaanxi Energy vs. Zhejiang Kingland Pipeline | Shaanxi Energy vs. Xinjiang Communications Construction | Shaanxi Energy vs. Sino Platinum Metals Co | Shaanxi Energy vs. China Citic Bank |
| Gansu Jiu vs. Zijin Mining Group | Gansu Jiu vs. Wanhua Chemical Group | Gansu Jiu vs. Baoshan Iron Steel | Gansu Jiu vs. Rongsheng Petrochemical 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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