Correlation Between Ye Chiu and Shanghai Electric
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By analyzing existing cross correlation between Ye Chiu Metal and Shanghai Electric Group, you can compare the effects of market volatilities on Ye Chiu and Shanghai Electric 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 Shanghai Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ye Chiu and Shanghai Electric.
Diversification Opportunities for Ye Chiu and Shanghai Electric
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 601388 and Shanghai is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ye Chiu Metal and Shanghai Electric Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Electric 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 Shanghai Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Electric has no effect on the direction of Ye Chiu i.e., Ye Chiu and Shanghai Electric go up and down completely randomly.
Pair Corralation between Ye Chiu and Shanghai Electric
Assuming the 90 days trading horizon Ye Chiu is expected to generate 27.64 times less return on investment than Shanghai Electric. But when comparing it to its historical volatility, Ye Chiu Metal is 2.27 times less risky than Shanghai Electric. It trades about 0.02 of its potential returns per unit of risk. Shanghai Electric Group is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 488.00 in Shanghai Electric Group on September 5, 2024 and sell it today you would earn a total of 487.00 from holding Shanghai Electric Group or generate 99.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ye Chiu Metal vs. Shanghai Electric Group
Performance |
| Timeline |
| Ye Chiu Metal |
| Shanghai Electric |
Ye Chiu and Shanghai Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ye Chiu and Shanghai Electric
The main advantage of trading using opposite Ye Chiu and Shanghai Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ye Chiu position performs unexpectedly, Shanghai Electric 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 Shanghai Electric will offset losses from the drop in Shanghai Electric's long position.| Ye Chiu vs. Wanhua Chemical Group | Ye Chiu vs. Baoshan Iron Steel | Ye Chiu vs. Rongsheng Petrochemical Co | Ye Chiu vs. Shandong Gold Mining |
| Shanghai Electric vs. Xiamen Goldenhome Co | Shanghai Electric vs. CITIC Metal Co | Shanghai Electric vs. Shandong Mining Machinery | Shanghai Electric vs. Ye Chiu Metal |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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