Correlation Between Shaanxi Meineng and Gansu Jiu
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By analyzing existing cross correlation between Shaanxi Meineng Clean and Gansu Jiu Steel, you can compare the effects of market volatilities on Shaanxi Meineng 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 Meineng with a short position of Gansu Jiu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Meineng and Gansu Jiu.
Diversification Opportunities for Shaanxi Meineng and Gansu Jiu
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shaanxi and Gansu is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Meineng Clean 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 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 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 Meineng i.e., Shaanxi Meineng and Gansu Jiu go up and down completely randomly.
Pair Corralation between Shaanxi Meineng and Gansu Jiu
Assuming the 90 days trading horizon Shaanxi Meineng Clean is expected to under-perform the Gansu Jiu. In addition to that, Shaanxi Meineng is 1.42 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 0.03 per unit of volatility. If you would invest 164.00 in Gansu Jiu Steel on September 12, 2024 and sell it today you would earn a total of 21.00 from holding Gansu Jiu Steel or generate 12.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaanxi Meineng Clean vs. Gansu Jiu Steel
Performance |
| Timeline |
| Shaanxi Meineng Clean |
| Gansu Jiu Steel |
Shaanxi Meineng and Gansu Jiu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Meineng and Gansu Jiu
The main advantage of trading using opposite Shaanxi Meineng and Gansu Jiu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Meineng 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 Meineng vs. Gansu Jiu Steel | Shaanxi Meineng vs. Shandong Mining Machinery | Shaanxi Meineng vs. Aba Chemicals Corp | Shaanxi Meineng vs. BlueFocus Communication Group |
| 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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