Correlation Between Sichuan Fulin and Gansu Jiu
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By analyzing existing cross correlation between Sichuan Fulin Transportation and Gansu Jiu Steel, you can compare the effects of market volatilities on Sichuan Fulin and Gansu Jiu 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 Sichuan Fulin with a short position of Gansu Jiu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Fulin and Gansu Jiu.
Diversification Opportunities for Sichuan Fulin and Gansu Jiu
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sichuan and Gansu is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Fulin Transportation and Gansu Jiu Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gansu Jiu Steel and Sichuan Fulin 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 Sichuan Fulin Transportation are associated (or correlated) with Gansu Jiu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gansu Jiu Steel has no effect on the direction of Sichuan Fulin i.e., Sichuan Fulin and Gansu Jiu go up and down completely randomly.
Pair Corralation between Sichuan Fulin and Gansu Jiu
Assuming the 90 days trading horizon Sichuan Fulin is expected to generate 1.16 times less return on investment than Gansu Jiu. But when comparing it to its historical volatility, Sichuan Fulin Transportation is 1.47 times less risky than Gansu Jiu. It trades about 0.21 of its potential returns per unit of risk. Gansu Jiu Steel is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 119.00 in Gansu Jiu Steel on September 2, 2024 and sell it today you would earn a total of 47.00 from holding Gansu Jiu Steel or generate 39.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Fulin Transportation vs. Gansu Jiu Steel
Performance |
| Timeline |
| Sichuan Fulin Transp |
| Gansu Jiu Steel |
Sichuan Fulin and Gansu Jiu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Fulin and Gansu Jiu
The main advantage of trading using opposite Sichuan Fulin and Gansu Jiu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Fulin position performs unexpectedly, Gansu Jiu 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 Gansu Jiu will offset losses from the drop in Gansu Jiu's long position.| Sichuan Fulin vs. Liaoning Chengda Biotechnology | Sichuan Fulin vs. Guangdong Marubi Biotechnology | Sichuan Fulin vs. Jiangxi Naipu Mining | Sichuan Fulin vs. Western Mining Co |
| Gansu Jiu vs. Western Metal Materials | Gansu Jiu vs. Chengtun Mining Group | Gansu Jiu vs. Uroica Mining Safety | Gansu Jiu vs. Beijing HuaYuanYiTong Thermal |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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