Correlation Between Shanghai Yanpu and Wuxi Chemical
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By analyzing existing cross correlation between Shanghai Yanpu Metal and Wuxi Chemical Equipment, you can compare the effects of market volatilities on Shanghai Yanpu and Wuxi Chemical 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 Wuxi Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yanpu and Wuxi Chemical.
Diversification Opportunities for Shanghai Yanpu and Wuxi Chemical
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Wuxi is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yanpu Metal and Wuxi Chemical Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuxi Chemical Equipment 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 Wuxi Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuxi Chemical Equipment has no effect on the direction of Shanghai Yanpu i.e., Shanghai Yanpu and Wuxi Chemical go up and down completely randomly.
Pair Corralation between Shanghai Yanpu and Wuxi Chemical
Assuming the 90 days trading horizon Shanghai Yanpu Metal is expected to under-perform the Wuxi Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Yanpu Metal is 1.15 times less risky than Wuxi Chemical. The stock trades about -0.23 of its potential returns per unit of risk. The Wuxi Chemical Equipment is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 3,607 in Wuxi Chemical Equipment on October 11, 2024 and sell it today you would lose (221.00) from holding Wuxi Chemical Equipment or give up 6.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Yanpu Metal vs. Wuxi Chemical Equipment
Performance |
| Timeline |
| Shanghai Yanpu Metal |
| Wuxi Chemical Equipment |
Shanghai Yanpu and Wuxi Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Yanpu and Wuxi Chemical
The main advantage of trading using opposite Shanghai Yanpu and Wuxi Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yanpu position performs unexpectedly, Wuxi Chemical 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 Wuxi Chemical will offset losses from the drop in Wuxi Chemical's long position.| Shanghai Yanpu vs. Jinhui Mining Co | Shanghai Yanpu vs. Guangdong Silvere Sci | Shanghai Yanpu vs. Gansu Huangtai Wine marketing | Shanghai Yanpu vs. Citic Guoan Wine |
| Wuxi Chemical vs. Beijing YanDong MicroElectronic | Wuxi Chemical vs. Integrated Electronic Systems | Wuxi Chemical vs. Chengdu Xingrong Investment | Wuxi Chemical vs. Postal Savings Bank |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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