Correlation Between Gansu Jiu and Shaanxi Meineng
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By analyzing existing cross correlation between Gansu Jiu Steel and Shaanxi Meineng Clean, you can compare the effects of market volatilities on Gansu Jiu and Shaanxi Meineng 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 Shaanxi Meineng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Shaanxi Meineng.
Diversification Opportunities for Gansu Jiu and Shaanxi Meineng
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gansu and Shaanxi is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Shaanxi Meineng Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Meineng Clean 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 Shaanxi Meineng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Meineng Clean has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Shaanxi Meineng go up and down completely randomly.
Pair Corralation between Gansu Jiu and Shaanxi Meineng
Assuming the 90 days trading horizon Gansu Jiu Steel is expected to generate 0.68 times more return on investment than Shaanxi Meineng. However, Gansu Jiu Steel is 1.47 times less risky than Shaanxi Meineng. It trades about 0.04 of its potential returns per unit of risk. Shaanxi Meineng Clean is currently generating about 0.0 per unit of risk. If you would invest 152.00 in Gansu Jiu Steel on September 12, 2024 and sell it today you would earn a total of 33.00 from holding Gansu Jiu Steel or generate 21.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Shaanxi Meineng Clean
Performance |
| Timeline |
| Gansu Jiu Steel |
| Shaanxi Meineng Clean |
Gansu Jiu and Shaanxi Meineng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Shaanxi Meineng
The main advantage of trading using opposite Gansu Jiu and Shaanxi Meineng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Shaanxi Meineng 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 Shaanxi Meineng will offset losses from the drop in Shaanxi Meineng's long position.| Gansu Jiu vs. Zijin Mining Group | Gansu Jiu vs. Wanhua Chemical Group | Gansu Jiu vs. Baoshan Iron Steel | Gansu Jiu vs. Rongsheng Petrochemical Co |
| Shaanxi Meineng vs. Gansu Jiu Steel | Shaanxi Meineng vs. Shandong Mining Machinery | Shaanxi Meineng vs. Aba Chemicals Corp | Shaanxi Meineng vs. BlueFocus Communication Group |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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