Correlation Between Shanghai Ziyan and Fujian Anjoy
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By analyzing existing cross correlation between Shanghai Ziyan Foods and Fujian Anjoy Foods, you can compare the effects of market volatilities on Shanghai Ziyan and Fujian Anjoy 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 Fujian Anjoy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Ziyan and Fujian Anjoy.
Diversification Opportunities for Shanghai Ziyan and Fujian Anjoy
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Fujian is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Ziyan Foods and Fujian Anjoy Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Anjoy Foods 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 Fujian Anjoy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Anjoy Foods has no effect on the direction of Shanghai Ziyan i.e., Shanghai Ziyan and Fujian Anjoy go up and down completely randomly.
Pair Corralation between Shanghai Ziyan and Fujian Anjoy
Assuming the 90 days trading horizon Shanghai Ziyan Foods is expected to generate 0.94 times more return on investment than Fujian Anjoy. However, Shanghai Ziyan Foods is 1.07 times less risky than Fujian Anjoy. It trades about -0.02 of its potential returns per unit of risk. Fujian Anjoy Foods is currently generating about -0.05 per unit of risk. If you would invest 2,498 in Shanghai Ziyan Foods on November 27, 2024 and sell it today you would lose (794.00) from holding Shanghai Ziyan Foods or give up 31.79% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Shanghai Ziyan Foods vs. Fujian Anjoy Foods
Performance |
Timeline |
Shanghai Ziyan Foods |
Fujian Anjoy Foods |
Shanghai Ziyan and Fujian Anjoy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shanghai Ziyan and Fujian Anjoy
The main advantage of trading using opposite Shanghai Ziyan and Fujian Anjoy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Ziyan position performs unexpectedly, Fujian Anjoy 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 Fujian Anjoy will offset losses from the drop in Fujian Anjoy's long position.Shanghai Ziyan vs. Shenzhen AV Display Co | ||
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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