Correlation Between Ye Chiu and Shanghai Action
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By analyzing existing cross correlation between Ye Chiu Metal and Shanghai Action Education, you can compare the effects of market volatilities on Ye Chiu and Shanghai Action 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 Action. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ye Chiu and Shanghai Action.
Diversification Opportunities for Ye Chiu and Shanghai Action
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between 601388 and Shanghai is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ye Chiu Metal and Shanghai Action Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Action Education 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 Action. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Action Education has no effect on the direction of Ye Chiu i.e., Ye Chiu and Shanghai Action go up and down completely randomly.
Pair Corralation between Ye Chiu and Shanghai Action
Assuming the 90 days trading horizon Ye Chiu Metal is expected to under-perform the Shanghai Action. But the stock apears to be less risky and, when comparing its historical volatility, Ye Chiu Metal is 1.22 times less risky than Shanghai Action. The stock trades about -0.09 of its potential returns per unit of risk. The Shanghai Action Education is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 3,585 in Shanghai Action Education on November 7, 2024 and sell it today you would lose (32.00) from holding Shanghai Action Education or give up 0.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ye Chiu Metal vs. Shanghai Action Education
Performance |
| Timeline |
| Ye Chiu Metal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shanghai Action Education |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ye Chiu and Shanghai Action Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ye Chiu and Shanghai Action
The main advantage of trading using opposite Ye Chiu and Shanghai Action positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ye Chiu position performs unexpectedly, Shanghai Action 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 Action will offset losses from the drop in Shanghai Action's long position.The idea behind Ye Chiu Metal and Shanghai Action Education pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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