Correlation Between Shanghai Yanpu and China Union
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By analyzing existing cross correlation between Shanghai Yanpu Metal and China Union Holdings, you can compare the effects of market volatilities on Shanghai Yanpu and China Union 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 Yanpu with a short position of China Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yanpu and China Union.
Diversification Opportunities for Shanghai Yanpu and China Union
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shanghai and China is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yanpu Metal and China Union Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Union Holdings and Shanghai Yanpu 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 Yanpu Metal are associated (or correlated) with China Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Union Holdings has no effect on the direction of Shanghai Yanpu i.e., Shanghai Yanpu and China Union go up and down completely randomly.
Pair Corralation between Shanghai Yanpu and China Union
Assuming the 90 days trading horizon Shanghai Yanpu Metal is expected to generate 0.92 times more return on investment than China Union. However, Shanghai Yanpu Metal is 1.08 times less risky than China Union. It trades about -0.17 of its potential returns per unit of risk. China Union Holdings is currently generating about -0.63 per unit of risk. If you would invest 3,980 in Shanghai Yanpu Metal on October 16, 2024 and sell it today you would lose (256.00) from holding Shanghai Yanpu Metal or give up 6.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Shanghai Yanpu Metal vs. China Union Holdings
Performance |
| Timeline |
| Shanghai Yanpu Metal |
| China Union Holdings |
Shanghai Yanpu and China Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Yanpu and China Union
The main advantage of trading using opposite Shanghai Yanpu and China Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yanpu position performs unexpectedly, China Union 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 China Union will offset losses from the drop in China Union's long position.| Shanghai Yanpu vs. Allgens Medical Technology | Shanghai Yanpu vs. Shenzhen Zhongzhuang Construction | Shanghai Yanpu vs. Cowealth Medical China | Shanghai Yanpu vs. Guangdong Transtek Medical |
| China Union vs. Zhejiang Yongjin Metal | China Union vs. Qiaoyin Environmental Tech | China Union vs. Shanghai Yanpu Metal | China Union vs. Ye Chiu Metal |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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