Correlation Between Shanghai Material and Guangdong Jingyi
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By analyzing existing cross correlation between Shanghai Material Trading and Guangdong Jingyi Metal, you can compare the effects of market volatilities on Shanghai Material 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 Shanghai Material with a short position of Guangdong Jingyi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Material and Guangdong Jingyi.
Diversification Opportunities for Shanghai Material and Guangdong Jingyi
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Guangdong is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Material Trading 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 Shanghai Material 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 Material Trading 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 Shanghai Material i.e., Shanghai Material and Guangdong Jingyi go up and down completely randomly.
Pair Corralation between Shanghai Material and Guangdong Jingyi
Assuming the 90 days trading horizon Shanghai Material Trading is expected to generate 1.15 times more return on investment than Guangdong Jingyi. However, Shanghai Material is 1.15 times more volatile than Guangdong Jingyi Metal. It trades about 0.05 of its potential returns per unit of risk. Guangdong Jingyi Metal is currently generating about 0.03 per unit of risk. If you would invest 1,017 in Shanghai Material Trading on September 3, 2024 and sell it today you would earn a total of 216.00 from holding Shanghai Material Trading or generate 21.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Material Trading vs. Guangdong Jingyi Metal
Performance |
| Timeline |
| Shanghai Material Trading |
| Guangdong Jingyi Metal |
Shanghai Material and Guangdong Jingyi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Material and Guangdong Jingyi
The main advantage of trading using opposite Shanghai Material and Guangdong Jingyi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Material 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.| Shanghai Material vs. Ye Chiu Metal | Shanghai Material vs. Jiangsu Jinling Sports | Shanghai Material vs. Xinjiang Baodi Mining | Shanghai Material vs. Hengli Industrial Development |
| Guangdong Jingyi vs. Zijin Mining Group | Guangdong Jingyi vs. Baoshan Iron Steel | Guangdong Jingyi vs. Rongsheng Petrochemical Co | Guangdong Jingyi vs. Hoshine Silicon Ind |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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