Correlation Between Shanghai Rongtai and Yunnan Jianzhijia
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By analyzing existing cross correlation between Shanghai Rongtai Health and Yunnan Jianzhijia Health Chain, you can compare the effects of market volatilities on Shanghai Rongtai and Yunnan Jianzhijia 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 Rongtai with a short position of Yunnan Jianzhijia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Rongtai and Yunnan Jianzhijia.
Diversification Opportunities for Shanghai Rongtai and Yunnan Jianzhijia
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Yunnan is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Rongtai Health and Yunnan Jianzhijia Health Chain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunnan Jianzhijia and Shanghai Rongtai 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 Rongtai Health are associated (or correlated) with Yunnan Jianzhijia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunnan Jianzhijia has no effect on the direction of Shanghai Rongtai i.e., Shanghai Rongtai and Yunnan Jianzhijia go up and down completely randomly.
Pair Corralation between Shanghai Rongtai and Yunnan Jianzhijia
Assuming the 90 days trading horizon Shanghai Rongtai Health is expected to generate 0.88 times more return on investment than Yunnan Jianzhijia. However, Shanghai Rongtai Health is 1.14 times less risky than Yunnan Jianzhijia. It trades about -0.02 of its potential returns per unit of risk. Yunnan Jianzhijia Health Chain is currently generating about -0.04 per unit of risk. If you would invest 1,963 in Shanghai Rongtai Health on September 1, 2024 and sell it today you would lose (477.00) from holding Shanghai Rongtai Health or give up 24.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Rongtai Health vs. Yunnan Jianzhijia Health Chain
Performance |
| Timeline |
| Shanghai Rongtai Health |
| Yunnan Jianzhijia |
Shanghai Rongtai and Yunnan Jianzhijia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Rongtai and Yunnan Jianzhijia
The main advantage of trading using opposite Shanghai Rongtai and Yunnan Jianzhijia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Rongtai position performs unexpectedly, Yunnan Jianzhijia 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 Yunnan Jianzhijia will offset losses from the drop in Yunnan Jianzhijia's long position.| Shanghai Rongtai vs. Hongrun Construction Group | Shanghai Rongtai vs. Tengda Construction Group | Shanghai Rongtai vs. Xiangyang Automobile Bearing | Shanghai Rongtai vs. Chongqing Changan Automobile |
| Yunnan Jianzhijia vs. Dalian Thermal Power | Yunnan Jianzhijia vs. Ningbo Jintian Copper | Yunnan Jianzhijia vs. Pengxin International Mining | Yunnan Jianzhijia vs. Juewei Food 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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