Correlation Between Shandong Hongchuang and Zhejiang Yayi
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By analyzing existing cross correlation between Shandong Hongchuang Aluminum and Zhejiang Yayi Metal, you can compare the effects of market volatilities on Shandong Hongchuang and Zhejiang Yayi 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 Shandong Hongchuang with a short position of Zhejiang Yayi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Hongchuang and Zhejiang Yayi.
Diversification Opportunities for Shandong Hongchuang and Zhejiang Yayi
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shandong and Zhejiang is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Hongchuang Aluminum and Zhejiang Yayi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Yayi Metal and Shandong Hongchuang 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 Shandong Hongchuang Aluminum are associated (or correlated) with Zhejiang Yayi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Yayi Metal has no effect on the direction of Shandong Hongchuang i.e., Shandong Hongchuang and Zhejiang Yayi go up and down completely randomly.
Pair Corralation between Shandong Hongchuang and Zhejiang Yayi
Assuming the 90 days trading horizon Shandong Hongchuang Aluminum is expected to generate 0.66 times more return on investment than Zhejiang Yayi. However, Shandong Hongchuang Aluminum is 1.52 times less risky than Zhejiang Yayi. It trades about 0.06 of its potential returns per unit of risk. Zhejiang Yayi Metal is currently generating about 0.01 per unit of risk. If you would invest 432.00 in Shandong Hongchuang Aluminum on September 3, 2024 and sell it today you would earn a total of 300.00 from holding Shandong Hongchuang Aluminum or generate 69.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Hongchuang Aluminum vs. Zhejiang Yayi Metal
Performance |
| Timeline |
| Shandong Hongchuang |
| Zhejiang Yayi Metal |
Shandong Hongchuang and Zhejiang Yayi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Hongchuang and Zhejiang Yayi
The main advantage of trading using opposite Shandong Hongchuang and Zhejiang Yayi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Hongchuang position performs unexpectedly, Zhejiang Yayi 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 Zhejiang Yayi will offset losses from the drop in Zhejiang Yayi's long position.| Shandong Hongchuang vs. Zijin Mining Group | Shandong Hongchuang vs. Baoshan Iron Steel | Shandong Hongchuang vs. Rongsheng Petrochemical Co | Shandong Hongchuang vs. Hoshine Silicon Ind |
| Zhejiang Yayi vs. Ningxia Building Materials | Zhejiang Yayi vs. Super Dragon Engineering Plastics | Zhejiang Yayi vs. Dawning Information Industry | Zhejiang Yayi vs. Xinke Material |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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