Correlation Between ZYF Lopsking and Shandong Hongchuang
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By analyzing existing cross correlation between ZYF Lopsking Aluminum and Shandong Hongchuang Aluminum, you can compare the effects of market volatilities on ZYF Lopsking and Shandong Hongchuang 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 ZYF Lopsking with a short position of Shandong Hongchuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZYF Lopsking and Shandong Hongchuang.
Diversification Opportunities for ZYF Lopsking and Shandong Hongchuang
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ZYF and Shandong is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding ZYF Lopsking Aluminum and Shandong Hongchuang Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Hongchuang and ZYF Lopsking 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 ZYF Lopsking Aluminum are associated (or correlated) with Shandong Hongchuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Hongchuang has no effect on the direction of ZYF Lopsking i.e., ZYF Lopsking and Shandong Hongchuang go up and down completely randomly.
Pair Corralation between ZYF Lopsking and Shandong Hongchuang
Assuming the 90 days trading horizon ZYF Lopsking is expected to generate 3.93 times less return on investment than Shandong Hongchuang. But when comparing it to its historical volatility, ZYF Lopsking Aluminum is 1.25 times less risky than Shandong Hongchuang. It trades about 0.03 of its potential returns per unit of risk. Shandong Hongchuang Aluminum is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 575.00 in Shandong Hongchuang Aluminum on September 3, 2024 and sell it today you would earn a total of 157.00 from holding Shandong Hongchuang Aluminum or generate 27.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZYF Lopsking Aluminum vs. Shandong Hongchuang Aluminum
Performance |
| Timeline |
| ZYF Lopsking Aluminum |
| Shandong Hongchuang |
ZYF Lopsking and Shandong Hongchuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZYF Lopsking and Shandong Hongchuang
The main advantage of trading using opposite ZYF Lopsking and Shandong Hongchuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZYF Lopsking position performs unexpectedly, Shandong Hongchuang 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 Shandong Hongchuang will offset losses from the drop in Shandong Hongchuang's long position.| ZYF Lopsking vs. Zijin Mining Group | ZYF Lopsking vs. Baoshan Iron Steel | ZYF Lopsking vs. Hoshine Silicon Ind |
| Shandong Hongchuang vs. Zijin Mining Group | Shandong Hongchuang vs. Baoshan Iron Steel | Shandong Hongchuang vs. Hoshine Silicon Ind |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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