Correlation Between Guangdong Jingyi and Shanghai Material
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By analyzing existing cross correlation between Guangdong Jingyi Metal and Shanghai Material Trading, you can compare the effects of market volatilities on Guangdong Jingyi and Shanghai Material 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 Shanghai Material. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Jingyi and Shanghai Material.
Diversification Opportunities for Guangdong Jingyi and Shanghai Material
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Shanghai is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Jingyi Metal and Shanghai Material Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Material Trading 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 Shanghai Material. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Material Trading has no effect on the direction of Guangdong Jingyi i.e., Guangdong Jingyi and Shanghai Material go up and down completely randomly.
Pair Corralation between Guangdong Jingyi and Shanghai Material
Assuming the 90 days trading horizon Guangdong Jingyi is expected to generate 2.21 times less return on investment than Shanghai Material. But when comparing it to its historical volatility, Guangdong Jingyi Metal is 1.91 times less risky than Shanghai Material. It trades about 0.2 of its potential returns per unit of risk. Shanghai Material Trading is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 980.00 in Shanghai Material Trading on September 1, 2024 and sell it today you would earn a total of 253.00 from holding Shanghai Material Trading or generate 25.82% 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. Shanghai Material Trading
Performance |
| Timeline |
| Guangdong Jingyi Metal |
| Shanghai Material Trading |
Guangdong Jingyi and Shanghai Material Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Jingyi and Shanghai Material
The main advantage of trading using opposite Guangdong Jingyi and Shanghai Material positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Jingyi position performs unexpectedly, Shanghai Material 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 Shanghai Material will offset losses from the drop in Shanghai Material's long position.| Guangdong Jingyi vs. Zijin Mining Group | Guangdong Jingyi vs. Wanhua Chemical Group | Guangdong Jingyi vs. Baoshan Iron Steel | Guangdong Jingyi vs. Shandong Gold Mining |
| Shanghai Material vs. Ming Yang Smart | Shanghai Material vs. 159681 | Shanghai Material vs. 159005 | Shanghai Material vs. Loctek Ergonomic Technology |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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