Correlation Between Shanghai Jinfeng and Fuda Alloy
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By analyzing existing cross correlation between Shanghai Jinfeng Wine and Fuda Alloy Materials, you can compare the effects of market volatilities on Shanghai Jinfeng and Fuda Alloy 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 Fuda Alloy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Jinfeng and Fuda Alloy.
Diversification Opportunities for Shanghai Jinfeng and Fuda Alloy
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shanghai and Fuda is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Jinfeng Wine and Fuda Alloy Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuda Alloy Materials 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 Fuda Alloy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuda Alloy Materials has no effect on the direction of Shanghai Jinfeng i.e., Shanghai Jinfeng and Fuda Alloy go up and down completely randomly.
Pair Corralation between Shanghai Jinfeng and Fuda Alloy
Assuming the 90 days trading horizon Shanghai Jinfeng Wine is expected to under-perform the Fuda Alloy. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Jinfeng Wine is 1.41 times less risky than Fuda Alloy. The stock trades about -0.16 of its potential returns per unit of risk. The Fuda Alloy Materials is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,274 in Fuda Alloy Materials on November 1, 2024 and sell it today you would earn a total of 243.00 from holding Fuda Alloy Materials or generate 19.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Jinfeng Wine vs. Fuda Alloy Materials
Performance |
| Timeline |
| Shanghai Jinfeng Wine |
| Fuda Alloy Materials |
Shanghai Jinfeng and Fuda Alloy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Jinfeng and Fuda Alloy
The main advantage of trading using opposite Shanghai Jinfeng and Fuda Alloy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Jinfeng position performs unexpectedly, Fuda Alloy 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 Fuda Alloy will offset losses from the drop in Fuda Alloy's long position.| Shanghai Jinfeng vs. Chengdu Kanghua Biological | Shanghai Jinfeng vs. Beijing Wantai Biological | Shanghai Jinfeng vs. Suzhou Novoprotein Scientific | Shanghai Jinfeng vs. Aluminum Corp of |
| Fuda Alloy vs. China Mobile Limited | Fuda Alloy vs. Shanghai Jinfeng Wine | Fuda Alloy vs. Nanjing Putian Telecommunications | Fuda Alloy vs. Sichuan Fulin Transportation |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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