Correlation Between Hunan Tyen and Shanghai Yanpu
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By analyzing existing cross correlation between Hunan Tyen Machinery and Shanghai Yanpu Metal, you can compare the effects of market volatilities on Hunan Tyen 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 Hunan Tyen with a short position of Shanghai Yanpu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Tyen and Shanghai Yanpu.
Diversification Opportunities for Hunan Tyen and Shanghai Yanpu
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hunan and Shanghai is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Tyen Machinery 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 Hunan Tyen 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 Hunan Tyen Machinery 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 Hunan Tyen i.e., Hunan Tyen and Shanghai Yanpu go up and down completely randomly.
Pair Corralation between Hunan Tyen and Shanghai Yanpu
Assuming the 90 days trading horizon Hunan Tyen Machinery is expected to generate 1.09 times more return on investment than Shanghai Yanpu. However, Hunan Tyen is 1.09 times more volatile than Shanghai Yanpu Metal. It trades about 0.02 of its potential returns per unit of risk. Shanghai Yanpu Metal is currently generating about 0.02 per unit of risk. If you would invest 504.00 in Hunan Tyen Machinery on November 19, 2024 and sell it today you would earn a total of 65.00 from holding Hunan Tyen Machinery or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunan Tyen Machinery vs. Shanghai Yanpu Metal
Performance |
| Timeline |
| Hunan Tyen Machinery |
| Shanghai Yanpu Metal |
Hunan Tyen and Shanghai Yanpu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Tyen and Shanghai Yanpu
The main advantage of trading using opposite Hunan Tyen and Shanghai Yanpu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Tyen 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.| Hunan Tyen vs. China Satellite Communications | Hunan Tyen vs. Xinjiang Communications Construction | Hunan Tyen vs. Southern PublishingMedia Co | Hunan Tyen vs. Northern United Publishing |
| Shanghai Yanpu vs. Citic Guoan Wine | Shanghai Yanpu vs. Southchip Semiconductor Technology | Shanghai Yanpu vs. Chongqing Shunbo Aluminum | Shanghai Yanpu vs. Kuaijishan Shaoxing Rice |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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