Correlation Between Shanghai Material and YLZ Information
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By analyzing existing cross correlation between Shanghai Material Trading and YLZ Information Tech, you can compare the effects of market volatilities on Shanghai Material and YLZ Information 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 YLZ Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Material and YLZ Information.
Diversification Opportunities for Shanghai Material and YLZ Information
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and YLZ is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Material Trading and YLZ Information Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YLZ Information Tech 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 YLZ Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YLZ Information Tech has no effect on the direction of Shanghai Material i.e., Shanghai Material and YLZ Information go up and down completely randomly.
Pair Corralation between Shanghai Material and YLZ Information
Assuming the 90 days trading horizon Shanghai Material Trading is expected to under-perform the YLZ Information. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Material Trading is 1.55 times less risky than YLZ Information. The stock trades about -0.17 of its potential returns per unit of risk. The YLZ Information Tech is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 317.00 in YLZ Information Tech on November 3, 2024 and sell it today you would earn a total of 9.00 from holding YLZ Information Tech or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Material Trading vs. YLZ Information Tech
Performance |
| Timeline |
| Shanghai Material Trading |
| YLZ Information Tech |
Shanghai Material and YLZ Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Material and YLZ Information
The main advantage of trading using opposite Shanghai Material and YLZ Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Material position performs unexpectedly, YLZ Information 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 YLZ Information will offset losses from the drop in YLZ Information's long position.| Shanghai Material vs. Industrial and Commercial | Shanghai Material vs. Kweichow Moutai Co | Shanghai Material vs. Agricultural Bank of | Shanghai Material vs. China Mobile Limited |
| YLZ Information vs. Industrial and Commercial | YLZ Information vs. Kweichow Moutai Co | YLZ Information vs. Agricultural Bank of | YLZ Information vs. China Mobile Limited |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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