Correlation Between Chin Yang and Ni Steel
Can any of the company-specific risk be diversified away by investing in both Chin Yang and Ni Steel at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Chin Yang and Ni Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chin Yang Chemical and Ni Steel, you can compare the effects of market volatilities on Chin Yang and Ni Steel 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 Chin Yang with a short position of Ni Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chin Yang and Ni Steel.
Diversification Opportunities for Chin Yang and Ni Steel
Weak diversification
The 3 months correlation between Chin and 008260 is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Chin Yang Chemical and Ni Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ni Steel and Chin Yang 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 Chin Yang Chemical are associated (or correlated) with Ni Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ni Steel has no effect on the direction of Chin Yang i.e., Chin Yang and Ni Steel go up and down completely randomly.
Pair Corralation between Chin Yang and Ni Steel
Assuming the 90 days trading horizon Chin Yang Chemical is expected to under-perform the Ni Steel. But the stock apears to be less risky and, when comparing its historical volatility, Chin Yang Chemical is 1.03 times less risky than Ni Steel. The stock trades about -0.18 of its potential returns per unit of risk. The Ni Steel is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 379,500 in Ni Steel on August 29, 2024 and sell it today you would earn a total of 7,500 from holding Ni Steel or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chin Yang Chemical vs. Ni Steel
Performance |
| Timeline |
| Chin Yang Chemical |
| Ni Steel |
Chin Yang and Ni Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chin Yang and Ni Steel
The main advantage of trading using opposite Chin Yang and Ni Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chin Yang position performs unexpectedly, Ni Steel 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 Ni Steel will offset losses from the drop in Ni Steel's long position.| Chin Yang vs. AptaBio Therapeutics | Chin Yang vs. Daewoo SBI SPAC | Chin Yang vs. Dream Security co | Chin Yang vs. Microfriend |
| Ni Steel vs. Jeju Air Co | Ni Steel vs. Daejoo Electronic Materials | Ni Steel vs. TOPMATERIAL LTD | Ni Steel vs. LAKE MATERIALS LTD |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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