Correlation Between Hefei Metalforming and Shanghai Yanpu
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By analyzing existing cross correlation between Hefei Metalforming Mach and Shanghai Yanpu Metal, you can compare the effects of market volatilities on Hefei Metalforming and Shanghai Yanpu 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 Hefei Metalforming with a short position of Shanghai Yanpu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hefei Metalforming and Shanghai Yanpu.
Diversification Opportunities for Hefei Metalforming and Shanghai Yanpu
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hefei and Shanghai is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Hefei Metalforming Mach and Shanghai Yanpu Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Yanpu Metal and Hefei Metalforming 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 Hefei Metalforming Mach are associated (or correlated) with Shanghai Yanpu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Yanpu Metal has no effect on the direction of Hefei Metalforming i.e., Hefei Metalforming and Shanghai Yanpu go up and down completely randomly.
Pair Corralation between Hefei Metalforming and Shanghai Yanpu
Assuming the 90 days trading horizon Hefei Metalforming Mach is expected to generate 1.99 times more return on investment than Shanghai Yanpu. However, Hefei Metalforming is 1.99 times more volatile than Shanghai Yanpu Metal. It trades about 0.11 of its potential returns per unit of risk. Shanghai Yanpu Metal is currently generating about -0.22 per unit of risk. If you would invest 751.00 in Hefei Metalforming Mach on August 27, 2024 and sell it today you would earn a total of 57.00 from holding Hefei Metalforming Mach or generate 7.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hefei Metalforming Mach vs. Shanghai Yanpu Metal
Performance |
| Timeline |
| Hefei Metalforming Mach |
| Shanghai Yanpu Metal |
Hefei Metalforming and Shanghai Yanpu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hefei Metalforming and Shanghai Yanpu
The main advantage of trading using opposite Hefei Metalforming and Shanghai Yanpu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hefei Metalforming position performs unexpectedly, Shanghai Yanpu 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 Yanpu will offset losses from the drop in Shanghai Yanpu's long position.| Hefei Metalforming vs. Biwin Storage Technology | Hefei Metalforming vs. PetroChina Co Ltd | Hefei Metalforming vs. Industrial and Commercial | Hefei Metalforming vs. China Construction Bank |
| Shanghai Yanpu vs. Loongson Technology Corp | Shanghai Yanpu vs. Chongqing Road Bridge | Shanghai Yanpu vs. Shenzhen Fortune Trend | Shanghai Yanpu vs. Wuhan Xianglong Power |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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