Correlation Between Guangdong Jingyi and Shenyang Blue
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By analyzing existing cross correlation between Guangdong Jingyi Metal and Shenyang Blue Silver, you can compare the effects of market volatilities on Guangdong Jingyi and Shenyang Blue 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 Shenyang Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Jingyi and Shenyang Blue.
Diversification Opportunities for Guangdong Jingyi and Shenyang Blue
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Shenyang is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Jingyi Metal and Shenyang Blue Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenyang Blue Silver 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 Shenyang Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenyang Blue Silver has no effect on the direction of Guangdong Jingyi i.e., Guangdong Jingyi and Shenyang Blue go up and down completely randomly.
Pair Corralation between Guangdong Jingyi and Shenyang Blue
Assuming the 90 days trading horizon Guangdong Jingyi is expected to generate 2.43 times less return on investment than Shenyang Blue. But when comparing it to its historical volatility, Guangdong Jingyi Metal is 1.99 times less risky than Shenyang Blue. It trades about 0.11 of its potential returns per unit of risk. Shenyang Blue Silver is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,476 in Shenyang Blue Silver on September 3, 2024 and sell it today you would earn a total of 1,369 from holding Shenyang Blue Silver or generate 92.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Jingyi Metal vs. Shenyang Blue Silver
Performance |
| Timeline |
| Guangdong Jingyi Metal |
| Shenyang Blue Silver |
Guangdong Jingyi and Shenyang Blue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Jingyi and Shenyang Blue
The main advantage of trading using opposite Guangdong Jingyi and Shenyang Blue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Jingyi position performs unexpectedly, Shenyang Blue 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 Shenyang Blue will offset losses from the drop in Shenyang Blue's long position.| Guangdong Jingyi vs. Zijin Mining Group | Guangdong Jingyi vs. Baoshan Iron Steel | Guangdong Jingyi vs. Hoshine Silicon Ind |
| Shenyang Blue vs. Cultural Investment Holdings | Shenyang Blue vs. Gome Telecom Equipment | Shenyang Blue vs. Bus Online Co | Shenyang Blue vs. Holitech Technology 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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