Correlation Between Shanghai Material and Penyao Environmental
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By analyzing existing cross correlation between Shanghai Material Trading and Penyao Environmental Protection, you can compare the effects of market volatilities on Shanghai Material and Penyao Environmental 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 Penyao Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Material and Penyao Environmental.
Diversification Opportunities for Shanghai Material and Penyao Environmental
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Penyao is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Material Trading and Penyao Environmental Protectio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penyao Environmental 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 Penyao Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penyao Environmental has no effect on the direction of Shanghai Material i.e., Shanghai Material and Penyao Environmental go up and down completely randomly.
Pair Corralation between Shanghai Material and Penyao Environmental
Assuming the 90 days trading horizon Shanghai Material Trading is expected to under-perform the Penyao Environmental. In addition to that, Shanghai Material is 1.07 times more volatile than Penyao Environmental Protection. It trades about -0.29 of its total potential returns per unit of risk. Penyao Environmental Protection is currently generating about -0.2 per unit of volatility. If you would invest 595.00 in Penyao Environmental Protection on October 12, 2024 and sell it today you would lose (81.00) from holding Penyao Environmental Protection or give up 13.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Material Trading vs. Penyao Environmental Protectio
Performance |
| Timeline |
| Shanghai Material Trading |
| Penyao Environmental |
Shanghai Material and Penyao Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Material and Penyao Environmental
The main advantage of trading using opposite Shanghai Material and Penyao Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Material position performs unexpectedly, Penyao Environmental 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 Penyao Environmental will offset losses from the drop in Penyao Environmental's long position.| Shanghai Material vs. China Minmetals Rare | Shanghai Material vs. Xiandai Investment Co | Shanghai Material vs. Guangdong Jingyi Metal | Shanghai Material vs. Beijing Mainstreets Investment |
| Penyao Environmental vs. Zijin Mining Group | Penyao Environmental vs. Shenzhen Silver Basis | Penyao Environmental vs. AVIC Fund Management | Penyao Environmental vs. Innovative Medical Management |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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