Correlation Between Zhongtong Guomai and Shanghai Yanpu
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By analyzing existing cross correlation between Zhongtong Guomai Communication and Shanghai Yanpu Metal, you can compare the effects of market volatilities on Zhongtong Guomai 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 Zhongtong Guomai with a short position of Shanghai Yanpu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongtong Guomai and Shanghai Yanpu.
Diversification Opportunities for Zhongtong Guomai and Shanghai Yanpu
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhongtong and Shanghai is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Zhongtong Guomai Communication 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 Zhongtong Guomai 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 Zhongtong Guomai Communication 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 Zhongtong Guomai i.e., Zhongtong Guomai and Shanghai Yanpu go up and down completely randomly.
Pair Corralation between Zhongtong Guomai and Shanghai Yanpu
Assuming the 90 days trading horizon Zhongtong Guomai Communication is expected to under-perform the Shanghai Yanpu. In addition to that, Zhongtong Guomai is 1.14 times more volatile than Shanghai Yanpu Metal. It trades about -0.31 of its total potential returns per unit of risk. Shanghai Yanpu Metal is currently generating about 0.27 per unit of volatility. If you would invest 3,402 in Shanghai Yanpu Metal on September 18, 2024 and sell it today you would earn a total of 578.00 from holding Shanghai Yanpu Metal or generate 16.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongtong Guomai Communication vs. Shanghai Yanpu Metal
Performance |
| Timeline |
| Zhongtong Guomai Com |
| Shanghai Yanpu Metal |
Zhongtong Guomai and Shanghai Yanpu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongtong Guomai and Shanghai Yanpu
The main advantage of trading using opposite Zhongtong Guomai and Shanghai Yanpu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongtong Guomai 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.| Zhongtong Guomai vs. China Petroleum Chemical | Zhongtong Guomai vs. PetroChina Co Ltd | Zhongtong Guomai vs. China State Construction | Zhongtong Guomai vs. China Railway Group |
| Shanghai Yanpu vs. BeiGene | Shanghai Yanpu vs. Kweichow Moutai Co | Shanghai Yanpu vs. Beijing Roborock Technology | Shanghai Yanpu vs. G bits Network 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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