Correlation Between Shanghai Ziyan and Fuda Alloy
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By analyzing existing cross correlation between Shanghai Ziyan Foods and Fuda Alloy Materials, you can compare the effects of market volatilities on Shanghai Ziyan and Fuda Alloy 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 Fuda Alloy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Ziyan and Fuda Alloy.
Diversification Opportunities for Shanghai Ziyan and Fuda Alloy
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shanghai and Fuda is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Ziyan Foods and Fuda Alloy Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuda Alloy Materials 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 Fuda Alloy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuda Alloy Materials has no effect on the direction of Shanghai Ziyan i.e., Shanghai Ziyan and Fuda Alloy go up and down completely randomly.
Pair Corralation between Shanghai Ziyan and Fuda Alloy
Assuming the 90 days trading horizon Shanghai Ziyan is expected to generate 1.69 times less return on investment than Fuda Alloy. In addition to that, Shanghai Ziyan is 1.12 times more volatile than Fuda Alloy Materials. It trades about 0.08 of its total potential returns per unit of risk. Fuda Alloy Materials is currently generating about 0.14 per unit of volatility. If you would invest 934.00 in Fuda Alloy Materials on October 18, 2024 and sell it today you would earn a total of 531.00 from holding Fuda Alloy Materials or generate 56.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Ziyan Foods vs. Fuda Alloy Materials
Performance |
| Timeline |
| Shanghai Ziyan Foods |
| Fuda Alloy Materials |
Shanghai Ziyan and Fuda Alloy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Ziyan and Fuda Alloy
The main advantage of trading using opposite Shanghai Ziyan and Fuda Alloy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Ziyan position performs unexpectedly, Fuda Alloy 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 Fuda Alloy will offset losses from the drop in Fuda Alloy's long position.| Shanghai Ziyan vs. Beijing Watertek Information | Shanghai Ziyan vs. StarPower Semiconductor | Shanghai Ziyan vs. Zhongfu Information | Shanghai Ziyan vs. Qiming Information Technology |
| Fuda Alloy vs. Shenzhen SDG Information | Fuda Alloy vs. Inspur Software Co | Fuda Alloy vs. Sharetronic Data Technology | Fuda Alloy vs. Invengo Information Technology |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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