Correlation Between Zhejiang Yayi and Shantui Construction
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By analyzing existing cross correlation between Zhejiang Yayi Metal and Shantui Construction Machinery, you can compare the effects of market volatilities on Zhejiang Yayi and Shantui Construction 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 Zhejiang Yayi with a short position of Shantui Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Yayi and Shantui Construction.
Diversification Opportunities for Zhejiang Yayi and Shantui Construction
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Shantui is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Yayi Metal and Shantui Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shantui Construction and Zhejiang Yayi 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 Zhejiang Yayi Metal are associated (or correlated) with Shantui Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shantui Construction has no effect on the direction of Zhejiang Yayi i.e., Zhejiang Yayi and Shantui Construction go up and down completely randomly.
Pair Corralation between Zhejiang Yayi and Shantui Construction
Assuming the 90 days trading horizon Zhejiang Yayi is expected to generate 14.39 times less return on investment than Shantui Construction. But when comparing it to its historical volatility, Zhejiang Yayi Metal is 1.29 times less risky than Shantui Construction. It trades about 0.03 of its potential returns per unit of risk. Shantui Construction Machinery is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 760.00 in Shantui Construction Machinery on August 25, 2024 and sell it today you would earn a total of 250.00 from holding Shantui Construction Machinery or generate 32.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Yayi Metal vs. Shantui Construction Machinery
Performance |
| Timeline |
| Zhejiang Yayi Metal |
| Shantui Construction |
Zhejiang Yayi and Shantui Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Yayi and Shantui Construction
The main advantage of trading using opposite Zhejiang Yayi and Shantui Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Yayi position performs unexpectedly, Shantui Construction 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 Shantui Construction will offset losses from the drop in Shantui Construction's long position.| Zhejiang Yayi vs. China Petroleum Chemical | Zhejiang Yayi vs. PetroChina Co Ltd | Zhejiang Yayi vs. China State Construction | Zhejiang Yayi vs. China Railway Group |
| Shantui Construction vs. Guangzhou Haozhi Industrial | Shantui Construction vs. Sunwave Communications Co | Shantui Construction vs. Shandong Mining Machinery | Shantui Construction vs. Hainan Airlines 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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