Correlation Between Huafa Industrial and Shanghai Yanpu
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By analyzing existing cross correlation between Huafa Industrial Co and Shanghai Yanpu Metal, you can compare the effects of market volatilities on Huafa Industrial 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 Huafa Industrial with a short position of Shanghai Yanpu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and Shanghai Yanpu.
Diversification Opportunities for Huafa Industrial and Shanghai Yanpu
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Huafa and Shanghai is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial Co 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 Huafa Industrial 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 Huafa Industrial Co 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 Huafa Industrial i.e., Huafa Industrial and Shanghai Yanpu go up and down completely randomly.
Pair Corralation between Huafa Industrial and Shanghai Yanpu
Assuming the 90 days trading horizon Huafa Industrial Co is expected to under-perform the Shanghai Yanpu. But the stock apears to be less risky and, when comparing its historical volatility, Huafa Industrial Co is 1.02 times less risky than Shanghai Yanpu. The stock trades about -0.02 of its potential returns per unit of risk. The Shanghai Yanpu Metal is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,855 in Shanghai Yanpu Metal on September 2, 2024 and sell it today you would earn a total of 1,183 from holding Shanghai Yanpu Metal or generate 41.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huafa Industrial Co vs. Shanghai Yanpu Metal
Performance |
| Timeline |
| Huafa Industrial |
| Shanghai Yanpu Metal |
Huafa Industrial and Shanghai Yanpu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and Shanghai Yanpu
The main advantage of trading using opposite Huafa Industrial and Shanghai Yanpu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial 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.| Huafa Industrial vs. Ningbo Fangzheng Automobile | Huafa Industrial vs. Anhui Jianghuai Automobile | Huafa Industrial vs. Jinhe Biotechnology Co | Huafa Industrial vs. Guangzhou KingTeller Technology |
| Shanghai Yanpu vs. Beijing Jiaman Dress | Shanghai Yanpu vs. Guangdong Shenglu Telecommunication | Shanghai Yanpu vs. Hangzhou Pinming Software | Shanghai Yanpu vs. Sunwave Communications 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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