Correlation Between Gansu Jiu and Shanghai Yanpu
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By analyzing existing cross correlation between Gansu Jiu Steel and Shanghai Yanpu Metal, you can compare the effects of market volatilities on Gansu Jiu and Shanghai Yanpu 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 Shanghai Yanpu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Shanghai Yanpu.
Diversification Opportunities for Gansu Jiu and Shanghai Yanpu
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gansu and Shanghai is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Shanghai Yanpu Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Yanpu Metal 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 Shanghai Yanpu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Yanpu Metal has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Shanghai Yanpu go up and down completely randomly.
Pair Corralation between Gansu Jiu and Shanghai Yanpu
Assuming the 90 days trading horizon Gansu Jiu Steel is expected to generate 0.78 times more return on investment than Shanghai Yanpu. However, Gansu Jiu Steel is 1.28 times less risky than Shanghai Yanpu. It trades about 0.15 of its potential returns per unit of risk. Shanghai Yanpu Metal is currently generating about 0.03 per unit of risk. If you would invest 179.00 in Gansu Jiu Steel on September 13, 2024 and sell it today you would earn a total of 14.00 from holding Gansu Jiu Steel or generate 7.82% 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. Shanghai Yanpu Metal
Performance |
| Timeline |
| Gansu Jiu Steel |
| Shanghai Yanpu Metal |
Gansu Jiu and Shanghai Yanpu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Shanghai Yanpu
The main advantage of trading using opposite Gansu Jiu and Shanghai Yanpu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Shanghai Yanpu 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 Shanghai Yanpu will offset losses from the drop in Shanghai Yanpu's long position.| Gansu Jiu vs. China Construction Bank | Gansu Jiu vs. Industrial Bank Co | Gansu Jiu vs. Gansu Huangtai Wine marketing | Gansu Jiu vs. Guosheng Financial Holding |
| Shanghai Yanpu vs. BeiGene | Shanghai Yanpu vs. Kweichow Moutai Co | Shanghai Yanpu vs. Beijing Roborock Technology | Shanghai Yanpu vs. G bits Network Technology |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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