Correlation Between Gansu Jiu and Shenwu Energy
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By analyzing existing cross correlation between Gansu Jiu Steel and Shenwu Energy Saving, you can compare the effects of market volatilities on Gansu Jiu and Shenwu Energy 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 Gansu Jiu with a short position of Shenwu Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Shenwu Energy.
Diversification Opportunities for Gansu Jiu and Shenwu Energy
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gansu and Shenwu is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Shenwu Energy Saving in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenwu Energy Saving and Gansu Jiu 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 Gansu Jiu Steel are associated (or correlated) with Shenwu Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenwu Energy Saving has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Shenwu Energy go up and down completely randomly.
Pair Corralation between Gansu Jiu and Shenwu Energy
Assuming the 90 days trading horizon Gansu Jiu Steel is expected to under-perform the Shenwu Energy. But the stock apears to be less risky and, when comparing its historical volatility, Gansu Jiu Steel is 3.07 times less risky than Shenwu Energy. The stock trades about -0.25 of its potential returns per unit of risk. The Shenwu Energy Saving is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 352.00 in Shenwu Energy Saving on October 23, 2024 and sell it today you would earn a total of 47.00 from holding Shenwu Energy Saving or generate 13.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Shenwu Energy Saving
Performance |
| Timeline |
| Gansu Jiu Steel |
| Shenwu Energy Saving |
Gansu Jiu and Shenwu Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Shenwu Energy
The main advantage of trading using opposite Gansu Jiu and Shenwu Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Shenwu Energy 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 Shenwu Energy will offset losses from the drop in Shenwu Energy's long position.| Gansu Jiu vs. GRINM Semiconductor Materials | Gansu Jiu vs. TianJin 712 Communication | Gansu Jiu vs. Bank of Communications | Gansu Jiu vs. China Sports Industry |
| Shenwu Energy vs. Qilu Bank Co | Shenwu Energy vs. Digital China Information | Shenwu Energy vs. Ningbo Tech Bank Co | Shenwu Energy vs. CITIC Guoan Information |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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