Correlation Between Gansu Jiu and Shandong Ruifeng
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By analyzing existing cross correlation between Gansu Jiu Steel and Shandong Ruifeng Chemical, you can compare the effects of market volatilities on Gansu Jiu and Shandong Ruifeng 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 Shandong Ruifeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Shandong Ruifeng.
Diversification Opportunities for Gansu Jiu and Shandong Ruifeng
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gansu and Shandong is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Shandong Ruifeng Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Ruifeng Chemical 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 Shandong Ruifeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Ruifeng Chemical has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Shandong Ruifeng go up and down completely randomly.
Pair Corralation between Gansu Jiu and Shandong Ruifeng
Assuming the 90 days trading horizon Gansu Jiu is expected to generate 9.16 times less return on investment than Shandong Ruifeng. But when comparing it to its historical volatility, Gansu Jiu Steel is 1.81 times less risky than Shandong Ruifeng. It trades about 0.01 of its potential returns per unit of risk. Shandong Ruifeng Chemical is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 874.00 in Shandong Ruifeng Chemical on September 3, 2024 and sell it today you would earn a total of 226.00 from holding Shandong Ruifeng Chemical or generate 25.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Shandong Ruifeng Chemical
Performance |
| Timeline |
| Gansu Jiu Steel |
| Shandong Ruifeng Chemical |
Gansu Jiu and Shandong Ruifeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Shandong Ruifeng
The main advantage of trading using opposite Gansu Jiu and Shandong Ruifeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Shandong Ruifeng 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 Ruifeng will offset losses from the drop in Shandong Ruifeng's long position.| Gansu Jiu vs. Cangzhou Mingzhu Plastic | Gansu Jiu vs. Eastern Communications Co | Gansu Jiu vs. Western Metal Materials | Gansu Jiu vs. Ningbo Tip Rubber |
| Shandong Ruifeng vs. Beijing Bashi Media | Shandong Ruifeng vs. Air China Ltd | Shandong Ruifeng vs. Inly Media Co | Shandong Ruifeng vs. Bus Online 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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