Correlation Between Shandong Pharmaceutical and Guangdong Jingyi
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By analyzing existing cross correlation between Shandong Pharmaceutical Glass and Guangdong Jingyi Metal, you can compare the effects of market volatilities on Shandong Pharmaceutical and Guangdong Jingyi 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 Shandong Pharmaceutical with a short position of Guangdong Jingyi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Pharmaceutical and Guangdong Jingyi.
Diversification Opportunities for Shandong Pharmaceutical and Guangdong Jingyi
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shandong and Guangdong is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Pharmaceutical Glass and Guangdong Jingyi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Jingyi Metal and Shandong Pharmaceutical 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 Shandong Pharmaceutical Glass are associated (or correlated) with Guangdong Jingyi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Jingyi Metal has no effect on the direction of Shandong Pharmaceutical i.e., Shandong Pharmaceutical and Guangdong Jingyi go up and down completely randomly.
Pair Corralation between Shandong Pharmaceutical and Guangdong Jingyi
Assuming the 90 days trading horizon Shandong Pharmaceutical Glass is expected to under-perform the Guangdong Jingyi. But the stock apears to be less risky and, when comparing its historical volatility, Shandong Pharmaceutical Glass is 1.44 times less risky than Guangdong Jingyi. The stock trades about 0.0 of its potential returns per unit of risk. The Guangdong Jingyi Metal is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 696.00 in Guangdong Jingyi Metal on September 4, 2024 and sell it today you would earn a total of 53.00 from holding Guangdong Jingyi Metal or generate 7.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Pharmaceutical Glass vs. Guangdong Jingyi Metal
Performance |
| Timeline |
| Shandong Pharmaceutical |
| Guangdong Jingyi Metal |
Shandong Pharmaceutical and Guangdong Jingyi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Pharmaceutical and Guangdong Jingyi
The main advantage of trading using opposite Shandong Pharmaceutical and Guangdong Jingyi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Pharmaceutical position performs unexpectedly, Guangdong Jingyi 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 Guangdong Jingyi will offset losses from the drop in Guangdong Jingyi's long position.| Shandong Pharmaceutical vs. Sichuan Yahua Industrial | Shandong Pharmaceutical vs. Inspur Software Co | Shandong Pharmaceutical vs. Glodon Software Co | Shandong Pharmaceutical vs. Dareway Software Co |
| Guangdong Jingyi vs. Anji Foodstuff Co | Guangdong Jingyi vs. Guilin Seamild Foods | Guangdong Jingyi vs. Tianshan Aluminum Group | Guangdong Jingyi vs. Muyuan Foodstuff 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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