Correlation Between Huasi Agricultural and Shanghai Yanpu
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By analyzing existing cross correlation between Huasi Agricultural Development and Shanghai Yanpu Metal, you can compare the effects of market volatilities on Huasi Agricultural 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 Huasi Agricultural with a short position of Shanghai Yanpu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huasi Agricultural and Shanghai Yanpu.
Diversification Opportunities for Huasi Agricultural and Shanghai Yanpu
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Huasi and Shanghai is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Huasi Agricultural Development 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 Huasi Agricultural 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 Huasi Agricultural Development 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 Huasi Agricultural i.e., Huasi Agricultural and Shanghai Yanpu go up and down completely randomly.
Pair Corralation between Huasi Agricultural and Shanghai Yanpu
Assuming the 90 days trading horizon Huasi Agricultural is expected to generate 1.32 times less return on investment than Shanghai Yanpu. But when comparing it to its historical volatility, Huasi Agricultural Development is 1.32 times less risky than Shanghai Yanpu. It trades about 0.08 of its potential returns per unit of risk. Shanghai Yanpu Metal is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,694 in Shanghai Yanpu Metal on August 28, 2024 and sell it today you would earn a total of 173.00 from holding Shanghai Yanpu Metal or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huasi Agricultural Development vs. Shanghai Yanpu Metal
Performance |
| Timeline |
| Huasi Agricultural |
| Shanghai Yanpu Metal |
Huasi Agricultural and Shanghai Yanpu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huasi Agricultural and Shanghai Yanpu
The main advantage of trading using opposite Huasi Agricultural and Shanghai Yanpu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huasi Agricultural 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.| Huasi Agricultural vs. Industrial and Commercial | Huasi Agricultural vs. Agricultural Bank of | Huasi Agricultural vs. China Construction Bank | Huasi Agricultural vs. Bank of China |
| Shanghai Yanpu vs. Loongson Technology Corp | Shanghai Yanpu vs. Chongqing Road Bridge | Shanghai Yanpu vs. Shenzhen Fortune Trend | Shanghai Yanpu vs. Wuhan Xianglong Power |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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