Correlation Between Shanghai Yaoji and Shandong Ruifeng
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By analyzing existing cross correlation between Shanghai Yaoji Playing and Shandong Ruifeng Chemical, you can compare the effects of market volatilities on Shanghai Yaoji and Shandong Ruifeng 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 Shanghai Yaoji with a short position of Shandong Ruifeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yaoji and Shandong Ruifeng.
Diversification Opportunities for Shanghai Yaoji and Shandong Ruifeng
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Shandong is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yaoji Playing and Shandong Ruifeng Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Ruifeng Chemical and Shanghai Yaoji 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 Shanghai Yaoji Playing are associated (or correlated) with Shandong Ruifeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Ruifeng Chemical has no effect on the direction of Shanghai Yaoji i.e., Shanghai Yaoji and Shandong Ruifeng go up and down completely randomly.
Pair Corralation between Shanghai Yaoji and Shandong Ruifeng
Assuming the 90 days trading horizon Shanghai Yaoji is expected to generate 3.74 times less return on investment than Shandong Ruifeng. But when comparing it to its historical volatility, Shanghai Yaoji Playing is 1.13 times less risky than Shandong Ruifeng. It trades about 0.08 of its potential returns per unit of risk. Shandong Ruifeng Chemical is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 991.00 in Shandong Ruifeng Chemical on August 28, 2024 and sell it today you would earn a total of 300.00 from holding Shandong Ruifeng Chemical or generate 30.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Yaoji Playing vs. Shandong Ruifeng Chemical
Performance |
| Timeline |
| Shanghai Yaoji Playing |
| Shandong Ruifeng Chemical |
Shanghai Yaoji and Shandong Ruifeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Yaoji and Shandong Ruifeng
The main advantage of trading using opposite Shanghai Yaoji and Shandong Ruifeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yaoji position performs unexpectedly, Shandong Ruifeng 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 Shandong Ruifeng will offset losses from the drop in Shandong Ruifeng's long position.| Shanghai Yaoji vs. Shenzhen MYS Environmental | Shanghai Yaoji vs. AVIC Fund Management | Shanghai Yaoji vs. Shenzhen Bingchuan Network | Shanghai Yaoji vs. Penghua Shenzhen Energy |
| Shandong Ruifeng vs. Bloomage Biotechnology Corp | Shandong Ruifeng vs. Unigroup Guoxin Microelectronics | Shandong Ruifeng vs. Epoxy Base Electronic | Shandong Ruifeng vs. Techshine Electronics Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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