Correlation Between Shanghai Yanpu and Advanced Technology
Specify exactly 2 symbols:
By analyzing existing cross correlation between Shanghai Yanpu Metal and Advanced Technology Materials, you can compare the effects of market volatilities on Shanghai Yanpu and Advanced Technology 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 Advanced Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yanpu and Advanced Technology.
Diversification Opportunities for Shanghai Yanpu and Advanced Technology
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shanghai and Advanced is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yanpu Metal and Advanced Technology Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Technology 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 Advanced Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Technology has no effect on the direction of Shanghai Yanpu i.e., Shanghai Yanpu and Advanced Technology go up and down completely randomly.
Pair Corralation between Shanghai Yanpu and Advanced Technology
Assuming the 90 days trading horizon Shanghai Yanpu is expected to generate 3.23 times less return on investment than Advanced Technology. But when comparing it to its historical volatility, Shanghai Yanpu Metal is 1.53 times less risky than Advanced Technology. It trades about 0.07 of its potential returns per unit of risk. Advanced Technology Materials is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,117 in Advanced Technology Materials on November 8, 2024 and sell it today you would earn a total of 58.00 from holding Advanced Technology Materials or generate 5.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Yanpu Metal vs. Advanced Technology Materials
Performance |
| Timeline |
| Shanghai Yanpu Metal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Advanced Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Shanghai Yanpu and Advanced Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Yanpu and Advanced Technology
The main advantage of trading using opposite Shanghai Yanpu and Advanced Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yanpu position performs unexpectedly, Advanced Technology 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 Advanced Technology will offset losses from the drop in Advanced Technology's long position.The idea behind Shanghai Yanpu Metal and Advanced Technology Materials pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |