Correlation Between Shanghai Material and Anhui Tongguan
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By analyzing existing cross correlation between Shanghai Material Trading and Anhui Tongguan Copper, you can compare the effects of market volatilities on Shanghai Material and Anhui Tongguan 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 Anhui Tongguan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Material and Anhui Tongguan.
Diversification Opportunities for Shanghai Material and Anhui Tongguan
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shanghai and Anhui is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Material Trading and Anhui Tongguan Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Tongguan Copper 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 Anhui Tongguan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Tongguan Copper has no effect on the direction of Shanghai Material i.e., Shanghai Material and Anhui Tongguan go up and down completely randomly.
Pair Corralation between Shanghai Material and Anhui Tongguan
Assuming the 90 days trading horizon Shanghai Material Trading is expected to under-perform the Anhui Tongguan. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Material Trading is 1.34 times less risky than Anhui Tongguan. The stock trades about -0.15 of its potential returns per unit of risk. The Anhui Tongguan Copper is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,055 in Anhui Tongguan Copper on October 23, 2024 and sell it today you would earn a total of 64.00 from holding Anhui Tongguan Copper or generate 6.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Shanghai Material Trading vs. Anhui Tongguan Copper
Performance |
| Timeline |
| Shanghai Material Trading |
| Anhui Tongguan Copper |
Shanghai Material and Anhui Tongguan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Material and Anhui Tongguan
The main advantage of trading using opposite Shanghai Material and Anhui Tongguan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Material position performs unexpectedly, Anhui Tongguan 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 Anhui Tongguan will offset losses from the drop in Anhui Tongguan's long position.| Shanghai Material vs. Western Metal Materials | Shanghai Material vs. Bohai Leasing Co | Shanghai Material vs. Zhejiang Yongjin Metal | Shanghai Material vs. Tianshan Aluminum Group |
| Anhui Tongguan vs. Eit Environmental Development | Anhui Tongguan vs. Wuxi Xuelang Environmental | Anhui Tongguan vs. Fujian Nanwang Environment | Anhui Tongguan vs. Hangzhou Guotai Environmental |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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