Correlation Between Guangdong Jingyi and Chongqing Shunbo
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By analyzing existing cross correlation between Guangdong Jingyi Metal and Chongqing Shunbo Aluminum, you can compare the effects of market volatilities on Guangdong Jingyi and Chongqing Shunbo 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 Guangdong Jingyi with a short position of Chongqing Shunbo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Jingyi and Chongqing Shunbo.
Diversification Opportunities for Guangdong Jingyi and Chongqing Shunbo
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangdong and Chongqing is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Jingyi Metal and Chongqing Shunbo Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Shunbo Aluminum and Guangdong Jingyi 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 Guangdong Jingyi Metal are associated (or correlated) with Chongqing Shunbo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Shunbo Aluminum has no effect on the direction of Guangdong Jingyi i.e., Guangdong Jingyi and Chongqing Shunbo go up and down completely randomly.
Pair Corralation between Guangdong Jingyi and Chongqing Shunbo
Assuming the 90 days trading horizon Guangdong Jingyi Metal is expected to generate 0.63 times more return on investment than Chongqing Shunbo. However, Guangdong Jingyi Metal is 1.58 times less risky than Chongqing Shunbo. It trades about 0.22 of its potential returns per unit of risk. Chongqing Shunbo Aluminum is currently generating about 0.04 per unit of risk. If you would invest 718.00 in Guangdong Jingyi Metal on September 12, 2024 and sell it today you would earn a total of 55.00 from holding Guangdong Jingyi Metal or generate 7.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Guangdong Jingyi Metal vs. Chongqing Shunbo Aluminum
Performance |
| Timeline |
| Guangdong Jingyi Metal |
| Chongqing Shunbo Aluminum |
Guangdong Jingyi and Chongqing Shunbo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Jingyi and Chongqing Shunbo
The main advantage of trading using opposite Guangdong Jingyi and Chongqing Shunbo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Jingyi position performs unexpectedly, Chongqing Shunbo 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 Chongqing Shunbo will offset losses from the drop in Chongqing Shunbo's long position.| Guangdong Jingyi vs. Zijin Mining Group | Guangdong Jingyi vs. Wanhua Chemical Group | Guangdong Jingyi vs. Baoshan Iron Steel | Guangdong Jingyi vs. Rongsheng Petrochemical Co |
| Chongqing Shunbo vs. Zijin Mining Group | Chongqing Shunbo vs. Wanhua Chemical Group | Chongqing Shunbo vs. Baoshan Iron Steel | Chongqing Shunbo 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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