Correlation Between Shaanxi Meineng and Guangdong Jingyi
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By analyzing existing cross correlation between Shaanxi Meineng Clean and Guangdong Jingyi Metal, you can compare the effects of market volatilities on Shaanxi Meineng and Guangdong Jingyi 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 Meineng with a short position of Guangdong Jingyi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Meineng and Guangdong Jingyi.
Diversification Opportunities for Shaanxi Meineng and Guangdong Jingyi
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shaanxi and Guangdong is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Meineng Clean and Guangdong Jingyi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Jingyi Metal and Shaanxi Meineng 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 Meineng Clean are associated (or correlated) with Guangdong Jingyi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Jingyi Metal has no effect on the direction of Shaanxi Meineng i.e., Shaanxi Meineng and Guangdong Jingyi go up and down completely randomly.
Pair Corralation between Shaanxi Meineng and Guangdong Jingyi
Assuming the 90 days trading horizon Shaanxi Meineng is expected to generate 4.42 times less return on investment than Guangdong Jingyi. But when comparing it to its historical volatility, Shaanxi Meineng Clean is 1.15 times less risky than Guangdong Jingyi. It trades about 0.12 of its potential returns per unit of risk. Guangdong Jingyi Metal is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 620.00 in Guangdong Jingyi Metal on November 7, 2024 and sell it today you would earn a total of 109.00 from holding Guangdong Jingyi Metal or generate 17.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaanxi Meineng Clean vs. Guangdong Jingyi Metal
Performance |
| Timeline |
| Shaanxi Meineng Clean |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Guangdong Jingyi Metal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Shaanxi Meineng and Guangdong Jingyi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Meineng and Guangdong Jingyi
The main advantage of trading using opposite Shaanxi Meineng and Guangdong Jingyi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Meineng position performs unexpectedly, Guangdong Jingyi 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 Guangdong Jingyi will offset losses from the drop in Guangdong Jingyi's long position.The idea behind Shaanxi Meineng Clean and Guangdong Jingyi Metal 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.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 CEOs Directory module to screen CEOs from public companies around the world.
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