Correlation Between Shanghai Ziyan and Puyang Huicheng
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By analyzing existing cross correlation between Shanghai Ziyan Foods and Puyang Huicheng Electronic, you can compare the effects of market volatilities on Shanghai Ziyan and Puyang Huicheng 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 Puyang Huicheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Ziyan and Puyang Huicheng.
Diversification Opportunities for Shanghai Ziyan and Puyang Huicheng
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Puyang is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Ziyan Foods and Puyang Huicheng Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puyang Huicheng Elec 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 Puyang Huicheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puyang Huicheng Elec has no effect on the direction of Shanghai Ziyan i.e., Shanghai Ziyan and Puyang Huicheng go up and down completely randomly.
Pair Corralation between Shanghai Ziyan and Puyang Huicheng
Assuming the 90 days trading horizon Shanghai Ziyan is expected to generate 1.68 times less return on investment than Puyang Huicheng. But when comparing it to its historical volatility, Shanghai Ziyan Foods is 1.32 times less risky than Puyang Huicheng. It trades about 0.11 of its potential returns per unit of risk. Puyang Huicheng Electronic is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,233 in Puyang Huicheng Electronic on August 31, 2024 and sell it today you would earn a total of 381.00 from holding Puyang Huicheng Electronic or generate 30.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Ziyan Foods vs. Puyang Huicheng Electronic
Performance |
| Timeline |
| Shanghai Ziyan Foods |
| Puyang Huicheng Elec |
Shanghai Ziyan and Puyang Huicheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Ziyan and Puyang Huicheng
The main advantage of trading using opposite Shanghai Ziyan and Puyang Huicheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Ziyan position performs unexpectedly, Puyang Huicheng 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 Puyang Huicheng will offset losses from the drop in Puyang Huicheng's long position.| Shanghai Ziyan vs. China State Construction | Shanghai Ziyan vs. China Merchants Shekou | Shanghai Ziyan vs. Huafa Industrial Co | Shanghai Ziyan vs. China International Capital |
| Puyang Huicheng vs. Zijin Mining Group | Puyang Huicheng vs. Wanhua Chemical Group | Puyang Huicheng vs. Baoshan Iron Steel | Puyang Huicheng vs. Rongsheng Petrochemical Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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