Correlation Between Shanghai Ziyan and Guangdong Qunxing
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By analyzing existing cross correlation between Shanghai Ziyan Foods and Guangdong Qunxing Toys, you can compare the effects of market volatilities on Shanghai Ziyan and Guangdong Qunxing 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 Shanghai Ziyan with a short position of Guangdong Qunxing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Ziyan and Guangdong Qunxing.
Diversification Opportunities for Shanghai Ziyan and Guangdong Qunxing
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Guangdong is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Ziyan Foods and Guangdong Qunxing Toys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Qunxing Toys and Shanghai Ziyan 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 Shanghai Ziyan Foods are associated (or correlated) with Guangdong Qunxing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Qunxing Toys has no effect on the direction of Shanghai Ziyan i.e., Shanghai Ziyan and Guangdong Qunxing go up and down completely randomly.
Pair Corralation between Shanghai Ziyan and Guangdong Qunxing
Assuming the 90 days trading horizon Shanghai Ziyan Foods is expected to generate 0.81 times more return on investment than Guangdong Qunxing. However, Shanghai Ziyan Foods is 1.23 times less risky than Guangdong Qunxing. It trades about -0.31 of its potential returns per unit of risk. Guangdong Qunxing Toys is currently generating about -0.29 per unit of risk. If you would invest 2,046 in Shanghai Ziyan Foods on November 3, 2024 and sell it today you would lose (353.00) from holding Shanghai Ziyan Foods or give up 17.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Ziyan Foods vs. Guangdong Qunxing Toys
Performance |
| Timeline |
| Shanghai Ziyan Foods |
| Guangdong Qunxing Toys |
Shanghai Ziyan and Guangdong Qunxing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Ziyan and Guangdong Qunxing
The main advantage of trading using opposite Shanghai Ziyan and Guangdong Qunxing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Ziyan position performs unexpectedly, Guangdong Qunxing 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 Guangdong Qunxing will offset losses from the drop in Guangdong Qunxing's long position.| Shanghai Ziyan vs. Chengdu Kanghua Biological | Shanghai Ziyan vs. Beijing Wantai Biological | Shanghai Ziyan vs. Suzhou Novoprotein Scientific | Shanghai Ziyan vs. Aluminum Corp of |
| Guangdong Qunxing vs. New China Life | Guangdong Qunxing vs. Ming Yang Smart | Guangdong Qunxing vs. 159681 | Guangdong Qunxing vs. 159005 |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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