Correlation Between Shanghai Yanpu and Bengang Steel
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By analyzing existing cross correlation between Shanghai Yanpu Metal and Bengang Steel Plates, you can compare the effects of market volatilities on Shanghai Yanpu and Bengang Steel 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 Bengang Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yanpu and Bengang Steel.
Diversification Opportunities for Shanghai Yanpu and Bengang Steel
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Bengang is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yanpu Metal and Bengang Steel Plates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bengang Steel Plates 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 Bengang Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bengang Steel Plates has no effect on the direction of Shanghai Yanpu i.e., Shanghai Yanpu and Bengang Steel go up and down completely randomly.
Pair Corralation between Shanghai Yanpu and Bengang Steel
Assuming the 90 days trading horizon Shanghai Yanpu Metal is expected to generate 1.25 times more return on investment than Bengang Steel. However, Shanghai Yanpu is 1.25 times more volatile than Bengang Steel Plates. It trades about 0.01 of its potential returns per unit of risk. Bengang Steel Plates is currently generating about 0.01 per unit of risk. If you would invest 3,704 in Shanghai Yanpu Metal on October 7, 2024 and sell it today you would lose (55.00) from holding Shanghai Yanpu Metal or give up 1.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Yanpu Metal vs. Bengang Steel Plates
Performance |
| Timeline |
| Shanghai Yanpu Metal |
| Bengang Steel Plates |
Shanghai Yanpu and Bengang Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Yanpu and Bengang Steel
The main advantage of trading using opposite Shanghai Yanpu and Bengang Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yanpu position performs unexpectedly, Bengang Steel 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 Bengang Steel will offset losses from the drop in Bengang Steel's long position.| Shanghai Yanpu vs. Agricultural Bank of | Shanghai Yanpu vs. Postal Savings Bank | Shanghai Yanpu vs. Gansu Jiu Steel | Shanghai Yanpu vs. Shandong Mining Machinery |
| Bengang Steel vs. Zijin Mining Group | Bengang Steel vs. Wanhua Chemical Group | Bengang Steel vs. Baoshan Iron Steel | Bengang Steel vs. Rongsheng Petrochemical 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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