Correlation Between Shandong Hongchuang and Ye Chiu
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By analyzing existing cross correlation between Shandong Hongchuang Aluminum and Ye Chiu Metal, you can compare the effects of market volatilities on Shandong Hongchuang and Ye Chiu 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 Ye Chiu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Hongchuang and Ye Chiu.
Diversification Opportunities for Shandong Hongchuang and Ye Chiu
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shandong and 601388 is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Hongchuang Aluminum and Ye Chiu Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ye Chiu 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 Ye Chiu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ye Chiu Metal has no effect on the direction of Shandong Hongchuang i.e., Shandong Hongchuang and Ye Chiu go up and down completely randomly.
Pair Corralation between Shandong Hongchuang and Ye Chiu
Assuming the 90 days trading horizon Shandong Hongchuang Aluminum is expected to generate 2.87 times more return on investment than Ye Chiu. However, Shandong Hongchuang is 2.87 times more volatile than Ye Chiu Metal. It trades about 0.21 of its potential returns per unit of risk. Ye Chiu Metal is currently generating about -0.13 per unit of risk. If you would invest 897.00 in Shandong Hongchuang Aluminum on November 3, 2024 and sell it today you would earn a total of 144.00 from holding Shandong Hongchuang Aluminum or generate 16.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Shandong Hongchuang Aluminum vs. Ye Chiu Metal
Performance |
| Timeline |
| Shandong Hongchuang |
| Ye Chiu Metal |
Shandong Hongchuang and Ye Chiu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Hongchuang and Ye Chiu
The main advantage of trading using opposite Shandong Hongchuang and Ye Chiu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Hongchuang position performs unexpectedly, Ye Chiu 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 Ye Chiu will offset losses from the drop in Ye Chiu's long position.| Shandong Hongchuang vs. Zijin Mining Group | Shandong Hongchuang vs. Wanhua Chemical Group | Shandong Hongchuang vs. Baoshan Iron Steel | Shandong Hongchuang vs. Shandong Gold Mining |
| Ye Chiu vs. Keda Clean Energy | Ye Chiu vs. Citic Guoan Wine | Ye Chiu vs. Tsingtao Brewery Co | Ye Chiu vs. Tonghua Grape Wine |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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