Correlation Between Gansu Jiu and Wuhan Yangtze
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By analyzing existing cross correlation between Gansu Jiu Steel and Wuhan Yangtze Communication, you can compare the effects of market volatilities on Gansu Jiu and Wuhan Yangtze 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 Wuhan Yangtze. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Wuhan Yangtze.
Diversification Opportunities for Gansu Jiu and Wuhan Yangtze
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gansu and Wuhan is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Wuhan Yangtze Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan Yangtze Commun 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 Wuhan Yangtze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan Yangtze Commun has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Wuhan Yangtze go up and down completely randomly.
Pair Corralation between Gansu Jiu and Wuhan Yangtze
Assuming the 90 days trading horizon Gansu Jiu is expected to generate 4.43 times less return on investment than Wuhan Yangtze. But when comparing it to its historical volatility, Gansu Jiu Steel is 1.75 times less risky than Wuhan Yangtze. It trades about 0.02 of its potential returns per unit of risk. Wuhan Yangtze Communication is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,553 in Wuhan Yangtze Communication on September 12, 2024 and sell it today you would earn a total of 1,427 from holding Wuhan Yangtze Communication or generate 91.89% 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. Wuhan Yangtze Communication
Performance |
| Timeline |
| Gansu Jiu Steel |
| Wuhan Yangtze Commun |
Gansu Jiu and Wuhan Yangtze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Wuhan Yangtze
The main advantage of trading using opposite Gansu Jiu and Wuhan Yangtze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Wuhan Yangtze 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 Wuhan Yangtze will offset losses from the drop in Wuhan Yangtze'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 |
| Wuhan Yangtze vs. Gansu Jiu Steel | Wuhan Yangtze vs. Shandong Mining Machinery | Wuhan Yangtze vs. Aba Chemicals Corp | Wuhan Yangtze 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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