Correlation Between Shanxi Lanhua and Gan Yuan
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By analyzing existing cross correlation between Shanxi Lanhua Sci Tech and Gan Yuan Foods, you can compare the effects of market volatilities on Shanxi Lanhua and Gan Yuan 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 Shanxi Lanhua with a short position of Gan Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanxi Lanhua and Gan Yuan.
Diversification Opportunities for Shanxi Lanhua and Gan Yuan
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanxi and Gan is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Shanxi Lanhua Sci Tech and Gan Yuan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gan Yuan Foods and Shanxi Lanhua 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 Shanxi Lanhua Sci Tech are associated (or correlated) with Gan Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gan Yuan Foods has no effect on the direction of Shanxi Lanhua i.e., Shanxi Lanhua and Gan Yuan go up and down completely randomly.
Pair Corralation between Shanxi Lanhua and Gan Yuan
Assuming the 90 days trading horizon Shanxi Lanhua Sci Tech is expected to under-perform the Gan Yuan. But the stock apears to be less risky and, when comparing its historical volatility, Shanxi Lanhua Sci Tech is 1.2 times less risky than Gan Yuan. The stock trades about 0.0 of its potential returns per unit of risk. The Gan Yuan Foods is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 7,183 in Gan Yuan Foods on September 3, 2024 and sell it today you would earn a total of 675.00 from holding Gan Yuan Foods or generate 9.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanxi Lanhua Sci Tech vs. Gan Yuan Foods
Performance |
| Timeline |
| Shanxi Lanhua Sci |
| Gan Yuan Foods |
Shanxi Lanhua and Gan Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanxi Lanhua and Gan Yuan
The main advantage of trading using opposite Shanxi Lanhua and Gan Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanxi Lanhua position performs unexpectedly, Gan Yuan 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 Gan Yuan will offset losses from the drop in Gan Yuan's long position.| Shanxi Lanhua vs. Gansu Jiu Steel | Shanxi Lanhua vs. Ming Yang Smart | Shanxi Lanhua vs. Aba Chemicals Corp | Shanxi Lanhua vs. Loctek Ergonomic Technology |
| Gan Yuan vs. Beijing Wantai Biological | Gan Yuan vs. Aluminum Corp of | Gan Yuan vs. COL Digital Publishing | Gan Yuan vs. Shaanxi Meineng Clean |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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