Correlation Between Changchun and Shanghai Yanpu
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By analyzing existing cross correlation between Changchun UP Optotech and Shanghai Yanpu Metal, you can compare the effects of market volatilities on Changchun and Shanghai Yanpu 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 Changchun with a short position of Shanghai Yanpu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun and Shanghai Yanpu.
Diversification Opportunities for Changchun and Shanghai Yanpu
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Changchun and Shanghai is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Changchun UP Optotech and Shanghai Yanpu Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Yanpu Metal and Changchun 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 Changchun UP Optotech are associated (or correlated) with Shanghai Yanpu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Yanpu Metal has no effect on the direction of Changchun i.e., Changchun and Shanghai Yanpu go up and down completely randomly.
Pair Corralation between Changchun and Shanghai Yanpu
Assuming the 90 days trading horizon Changchun UP Optotech is expected to under-perform the Shanghai Yanpu. In addition to that, Changchun is 1.32 times more volatile than Shanghai Yanpu Metal. It trades about -0.34 of its total potential returns per unit of risk. Shanghai Yanpu Metal is currently generating about -0.15 per unit of volatility. If you would invest 3,822 in Shanghai Yanpu Metal on October 12, 2024 and sell it today you would lose (225.00) from holding Shanghai Yanpu Metal or give up 5.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun UP Optotech vs. Shanghai Yanpu Metal
Performance |
| Timeline |
| Changchun UP Optotech |
| Shanghai Yanpu Metal |
Changchun and Shanghai Yanpu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun and Shanghai Yanpu
The main advantage of trading using opposite Changchun and Shanghai Yanpu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun position performs unexpectedly, Shanghai Yanpu 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 Yanpu will offset losses from the drop in Shanghai Yanpu's long position.| Changchun vs. Guangzhou KingTeller Technology | Changchun vs. Smartgiant Technology Co | Changchun vs. Kingsignal Technology Co | Changchun vs. Tianjin Ruixin Technology |
| Shanghai Yanpu vs. Beijing Kingsoft Office | Shanghai Yanpu vs. Fuzhou Rockchip Electronics | Shanghai Yanpu vs. Jinlong Machinery Electronic | Shanghai Yanpu vs. Weihai Honglin Electronic |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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