Correlation Between Gansu Jiu and Penyao Environmental
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By analyzing existing cross correlation between Gansu Jiu Steel and Penyao Environmental Protection, you can compare the effects of market volatilities on Gansu Jiu and Penyao Environmental 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 Penyao Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Penyao Environmental.
Diversification Opportunities for Gansu Jiu and Penyao Environmental
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gansu and Penyao is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Penyao Environmental Protectio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penyao Environmental 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 Penyao Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penyao Environmental has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Penyao Environmental go up and down completely randomly.
Pair Corralation between Gansu Jiu and Penyao Environmental
Assuming the 90 days trading horizon Gansu Jiu is expected to generate 5.06 times less return on investment than Penyao Environmental. But when comparing it to its historical volatility, Gansu Jiu Steel is 1.12 times less risky than Penyao Environmental. It trades about 0.01 of its potential returns per unit of risk. Penyao Environmental Protection is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 503.00 in Penyao Environmental Protection on September 2, 2024 and sell it today you would earn a total of 132.00 from holding Penyao Environmental Protection or generate 26.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Penyao Environmental Protectio
Performance |
| Timeline |
| Gansu Jiu Steel |
| Penyao Environmental |
Gansu Jiu and Penyao Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Penyao Environmental
The main advantage of trading using opposite Gansu Jiu and Penyao Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Penyao Environmental 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 Penyao Environmental will offset losses from the drop in Penyao Environmental's long position.| Gansu Jiu vs. Western Metal Materials | Gansu Jiu vs. Chengtun Mining Group | Gansu Jiu vs. Uroica Mining Safety | Gansu Jiu vs. Beijing HuaYuanYiTong Thermal |
| Penyao Environmental vs. Cultural Investment Holdings | Penyao Environmental vs. Gome Telecom Equipment | Penyao Environmental vs. Bus Online Co | Penyao Environmental vs. Holitech Technology 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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