Correlation Between Shanghai Jinfeng and Anhui Gujing
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By analyzing existing cross correlation between Shanghai Jinfeng Wine and Anhui Gujing Distillery, you can compare the effects of market volatilities on Shanghai Jinfeng and Anhui Gujing 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 Shanghai Jinfeng with a short position of Anhui Gujing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Jinfeng and Anhui Gujing.
Diversification Opportunities for Shanghai Jinfeng and Anhui Gujing
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Anhui is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Jinfeng Wine and Anhui Gujing Distillery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Gujing Distillery and Shanghai Jinfeng 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 Shanghai Jinfeng Wine are associated (or correlated) with Anhui Gujing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Gujing Distillery has no effect on the direction of Shanghai Jinfeng i.e., Shanghai Jinfeng and Anhui Gujing go up and down completely randomly.
Pair Corralation between Shanghai Jinfeng and Anhui Gujing
Assuming the 90 days trading horizon Shanghai Jinfeng Wine is expected to generate 0.8 times more return on investment than Anhui Gujing. However, Shanghai Jinfeng Wine is 1.25 times less risky than Anhui Gujing. It trades about 0.05 of its potential returns per unit of risk. Anhui Gujing Distillery is currently generating about -0.05 per unit of risk. If you would invest 525.00 in Shanghai Jinfeng Wine on August 31, 2024 and sell it today you would earn a total of 69.00 from holding Shanghai Jinfeng Wine or generate 13.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Jinfeng Wine vs. Anhui Gujing Distillery
Performance |
| Timeline |
| Shanghai Jinfeng Wine |
| Anhui Gujing Distillery |
Shanghai Jinfeng and Anhui Gujing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Jinfeng and Anhui Gujing
The main advantage of trading using opposite Shanghai Jinfeng and Anhui Gujing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Jinfeng position performs unexpectedly, Anhui Gujing 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 Anhui Gujing will offset losses from the drop in Anhui Gujing's long position.| Shanghai Jinfeng vs. Lutian Machinery Co | Shanghai Jinfeng vs. PetroChina Co Ltd | Shanghai Jinfeng vs. Bank of China | Shanghai Jinfeng vs. Gansu Jiu Steel |
| Anhui Gujing vs. Lutian Machinery Co | Anhui Gujing vs. PetroChina Co Ltd | Anhui Gujing vs. Bank of China | Anhui Gujing vs. Gansu Jiu Steel |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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