Correlation Between Ye Chiu and Shandong Hongchuang
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By analyzing existing cross correlation between Ye Chiu Metal and Shandong Hongchuang Aluminum, you can compare the effects of market volatilities on Ye Chiu and Shandong Hongchuang 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 Ye Chiu with a short position of Shandong Hongchuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ye Chiu and Shandong Hongchuang.
Diversification Opportunities for Ye Chiu and Shandong Hongchuang
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 601388 and Shandong is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Ye Chiu Metal and Shandong Hongchuang Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Hongchuang and Ye Chiu 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 Ye Chiu Metal are associated (or correlated) with Shandong Hongchuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Hongchuang has no effect on the direction of Ye Chiu i.e., Ye Chiu and Shandong Hongchuang go up and down completely randomly.
Pair Corralation between Ye Chiu and Shandong Hongchuang
Assuming the 90 days trading horizon Ye Chiu is expected to generate 8.43 times less return on investment than Shandong Hongchuang. But when comparing it to its historical volatility, Ye Chiu Metal is 1.24 times less risky than Shandong Hongchuang. It trades about 0.04 of its potential returns per unit of risk. Shandong Hongchuang Aluminum is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 506.00 in Shandong Hongchuang Aluminum on October 24, 2024 and sell it today you would earn a total of 508.00 from holding Shandong Hongchuang Aluminum or generate 100.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.75% |
| Values | Daily Returns |
Ye Chiu Metal vs. Shandong Hongchuang Aluminum
Performance |
| Timeline |
| Ye Chiu Metal |
| Shandong Hongchuang |
Ye Chiu and Shandong Hongchuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ye Chiu and Shandong Hongchuang
The main advantage of trading using opposite Ye Chiu and Shandong Hongchuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ye Chiu position performs unexpectedly, Shandong Hongchuang 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 Shandong Hongchuang will offset losses from the drop in Shandong Hongchuang's long position.| Ye Chiu vs. Zijin Mining Group | Ye Chiu vs. Wanhua Chemical Group | Ye Chiu vs. Baoshan Iron Steel | Ye Chiu vs. Shandong Gold Mining |
| Shandong Hongchuang vs. Shenyang Huitian Thermal | Shandong Hongchuang vs. Ningxia Building Materials | Shandong Hongchuang vs. Fuda Alloy Materials | Shandong Hongchuang vs. Guocheng Mining Co |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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