Correlation Between HUANLEJIA Food and Shanghai Yanpu
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By analyzing existing cross correlation between HUANLEJIA Food Group and Shanghai Yanpu Metal, you can compare the effects of market volatilities on HUANLEJIA Food 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 HUANLEJIA Food with a short position of Shanghai Yanpu. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUANLEJIA Food and Shanghai Yanpu.
Diversification Opportunities for HUANLEJIA Food and Shanghai Yanpu
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HUANLEJIA and Shanghai is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding HUANLEJIA Food Group 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 HUANLEJIA Food 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 HUANLEJIA Food Group 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 HUANLEJIA Food i.e., HUANLEJIA Food and Shanghai Yanpu go up and down completely randomly.
Pair Corralation between HUANLEJIA Food and Shanghai Yanpu
Assuming the 90 days trading horizon HUANLEJIA Food Group is expected to generate 1.38 times more return on investment than Shanghai Yanpu. However, HUANLEJIA Food is 1.38 times more volatile than Shanghai Yanpu Metal. It trades about 0.05 of its potential returns per unit of risk. Shanghai Yanpu Metal is currently generating about 0.03 per unit of risk. If you would invest 1,388 in HUANLEJIA Food Group on September 14, 2024 and sell it today you would earn a total of 487.00 from holding HUANLEJIA Food Group or generate 35.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HUANLEJIA Food Group vs. Shanghai Yanpu Metal
Performance |
| Timeline |
| HUANLEJIA Food Group |
| Shanghai Yanpu Metal |
HUANLEJIA Food and Shanghai Yanpu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUANLEJIA Food and Shanghai Yanpu
The main advantage of trading using opposite HUANLEJIA Food and Shanghai Yanpu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUANLEJIA Food 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.| HUANLEJIA Food vs. Shanghai Yanpu Metal | HUANLEJIA Food vs. Shanghai Shuixing Home | HUANLEJIA Food vs. Guocheng Mining Co | HUANLEJIA Food vs. Ye Chiu Metal |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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