Correlation Between Shaanxi Beiyuan and Changjiang Jinggong
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By analyzing existing cross correlation between Shaanxi Beiyuan Chemical and Changjiang Jinggong Steel, you can compare the effects of market volatilities on Shaanxi Beiyuan and Changjiang Jinggong 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 Shaanxi Beiyuan with a short position of Changjiang Jinggong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Beiyuan and Changjiang Jinggong.
Diversification Opportunities for Shaanxi Beiyuan and Changjiang Jinggong
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shaanxi and Changjiang is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Beiyuan Chemical and Changjiang Jinggong Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changjiang Jinggong Steel and Shaanxi Beiyuan 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 Shaanxi Beiyuan Chemical are associated (or correlated) with Changjiang Jinggong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changjiang Jinggong Steel has no effect on the direction of Shaanxi Beiyuan i.e., Shaanxi Beiyuan and Changjiang Jinggong go up and down completely randomly.
Pair Corralation between Shaanxi Beiyuan and Changjiang Jinggong
Assuming the 90 days trading horizon Shaanxi Beiyuan Chemical is expected to under-perform the Changjiang Jinggong. But the stock apears to be less risky and, when comparing its historical volatility, Shaanxi Beiyuan Chemical is 1.02 times less risky than Changjiang Jinggong. The stock trades about -0.21 of its potential returns per unit of risk. The Changjiang Jinggong Steel is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 302.00 in Changjiang Jinggong Steel on October 24, 2024 and sell it today you would lose (17.00) from holding Changjiang Jinggong Steel or give up 5.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Shaanxi Beiyuan Chemical vs. Changjiang Jinggong Steel
Performance |
| Timeline |
| Shaanxi Beiyuan Chemical |
| Changjiang Jinggong Steel |
Shaanxi Beiyuan and Changjiang Jinggong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Beiyuan and Changjiang Jinggong
The main advantage of trading using opposite Shaanxi Beiyuan and Changjiang Jinggong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Beiyuan position performs unexpectedly, Changjiang Jinggong 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 Changjiang Jinggong will offset losses from the drop in Changjiang Jinggong's long position.| Shaanxi Beiyuan vs. Changjiang Jinggong Steel | Shaanxi Beiyuan vs. Sinocat Environmental Technology | Shaanxi Beiyuan vs. Shenzhen MYS Environmental | Shaanxi Beiyuan vs. Shandong Iron and |
| Changjiang Jinggong vs. Chengdu Kanghua Biological | Changjiang Jinggong vs. Beijing Wantai Biological | Changjiang Jinggong vs. Suzhou Novoprotein Scientific | Changjiang Jinggong vs. Aluminum Corp of |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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