Correlation Between Yangmei Chemical and State Grid
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By analyzing existing cross correlation between Yangmei Chemical Co and State Grid InformationCommunication, you can compare the effects of market volatilities on Yangmei Chemical and State Grid 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 Yangmei Chemical with a short position of State Grid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yangmei Chemical and State Grid.
Diversification Opportunities for Yangmei Chemical and State Grid
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yangmei and State is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Yangmei Chemical Co and State Grid InformationCommunic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Grid Informati and Yangmei Chemical 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 Yangmei Chemical Co are associated (or correlated) with State Grid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Grid Informati has no effect on the direction of Yangmei Chemical i.e., Yangmei Chemical and State Grid go up and down completely randomly.
Pair Corralation between Yangmei Chemical and State Grid
Assuming the 90 days trading horizon Yangmei Chemical Co is expected to under-perform the State Grid. But the stock apears to be less risky and, when comparing its historical volatility, Yangmei Chemical Co is 1.0 times less risky than State Grid. The stock trades about -0.02 of its potential returns per unit of risk. The State Grid InformationCommunication is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,692 in State Grid InformationCommunication on November 2, 2024 and sell it today you would earn a total of 88.00 from holding State Grid InformationCommunication or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yangmei Chemical Co vs. State Grid InformationCommunic
Performance |
| Timeline |
| Yangmei Chemical |
| State Grid Informati |
Yangmei Chemical and State Grid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yangmei Chemical and State Grid
The main advantage of trading using opposite Yangmei Chemical and State Grid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yangmei Chemical position performs unexpectedly, State Grid 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 State Grid will offset losses from the drop in State Grid's long position.| Yangmei Chemical vs. Beijing Jiaman Dress | Yangmei Chemical vs. GRINM Semiconductor Materials | Yangmei Chemical vs. Zbit Semiconductor A | Yangmei Chemical vs. Union Semiconductor Co |
| State Grid vs. Xiamen Bank Co | State Grid vs. Industrial Bank Co | State Grid vs. Shandong Sinoglory Health | State Grid vs. Agricultural Bank of |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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