Correlation Between Zhejiang Yayi and Shandong Hongchuang
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By analyzing existing cross correlation between Zhejiang Yayi Metal and Shandong Hongchuang Aluminum, you can compare the effects of market volatilities on Zhejiang Yayi and Shandong Hongchuang 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 Shandong Hongchuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Yayi and Shandong Hongchuang.
Diversification Opportunities for Zhejiang Yayi and Shandong Hongchuang
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Zhejiang and Shandong is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Yayi Metal and Shandong Hongchuang Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Hongchuang 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 Shandong Hongchuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Hongchuang has no effect on the direction of Zhejiang Yayi i.e., Zhejiang Yayi and Shandong Hongchuang go up and down completely randomly.
Pair Corralation between Zhejiang Yayi and Shandong Hongchuang
Assuming the 90 days trading horizon Zhejiang Yayi is expected to generate 4.16 times less return on investment than Shandong Hongchuang. In addition to that, Zhejiang Yayi is 1.52 times more volatile than Shandong Hongchuang Aluminum. It trades about 0.01 of its total potential returns per unit of risk. Shandong Hongchuang Aluminum is currently generating about 0.06 per unit of volatility. If you would invest 432.00 in Shandong Hongchuang Aluminum on September 3, 2024 and sell it today you would earn a total of 300.00 from holding Shandong Hongchuang Aluminum or generate 69.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Yayi Metal vs. Shandong Hongchuang Aluminum
Performance |
| Timeline |
| Zhejiang Yayi Metal |
| Shandong Hongchuang |
Zhejiang Yayi and Shandong Hongchuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Yayi and Shandong Hongchuang
The main advantage of trading using opposite Zhejiang Yayi and Shandong Hongchuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Yayi position performs unexpectedly, Shandong Hongchuang 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 Hongchuang will offset losses from the drop in Shandong Hongchuang's long position.| Zhejiang Yayi vs. Ningxia Building Materials | Zhejiang Yayi vs. Super Dragon Engineering Plastics | Zhejiang Yayi vs. Dawning Information Industry | Zhejiang Yayi vs. Xinke Material |
| Shandong Hongchuang vs. Zijin Mining Group | Shandong Hongchuang vs. Baoshan Iron Steel | Shandong Hongchuang vs. Rongsheng Petrochemical Co | Shandong Hongchuang vs. Hoshine Silicon Ind |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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