Correlation Between Shanghai Yanpu and Guangdong Jingyi
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By analyzing existing cross correlation between Shanghai Yanpu Metal and Guangdong Jingyi Metal, you can compare the effects of market volatilities on Shanghai Yanpu and Guangdong Jingyi 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 Guangdong Jingyi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yanpu and Guangdong Jingyi.
Diversification Opportunities for Shanghai Yanpu and Guangdong Jingyi
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Guangdong is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yanpu Metal and Guangdong Jingyi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Jingyi Metal 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 Guangdong Jingyi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Jingyi Metal has no effect on the direction of Shanghai Yanpu i.e., Shanghai Yanpu and Guangdong Jingyi go up and down completely randomly.
Pair Corralation between Shanghai Yanpu and Guangdong Jingyi
Assuming the 90 days trading horizon Shanghai Yanpu is expected to generate 2.61 times less return on investment than Guangdong Jingyi. In addition to that, Shanghai Yanpu is 1.18 times more volatile than Guangdong Jingyi Metal. It trades about 0.08 of its total potential returns per unit of risk. Guangdong Jingyi Metal is currently generating about 0.25 per unit of volatility. If you would invest 632.00 in Guangdong Jingyi Metal on August 29, 2024 and sell it today you would earn a total of 94.00 from holding Guangdong Jingyi Metal or generate 14.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Yanpu Metal vs. Guangdong Jingyi Metal
Performance |
| Timeline |
| Shanghai Yanpu Metal |
| Guangdong Jingyi Metal |
Shanghai Yanpu and Guangdong Jingyi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Yanpu and Guangdong Jingyi
The main advantage of trading using opposite Shanghai Yanpu and Guangdong Jingyi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yanpu position performs unexpectedly, Guangdong Jingyi 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 Guangdong Jingyi will offset losses from the drop in Guangdong Jingyi's long position.| Shanghai Yanpu vs. Loongson Technology Corp | Shanghai Yanpu vs. Chongqing Road Bridge | Shanghai Yanpu vs. Shenzhen Fortune Trend | Shanghai Yanpu vs. Wuhan Xianglong Power |
| Guangdong Jingyi vs. Zijin Mining Group | Guangdong Jingyi vs. Wanhua Chemical Group | Guangdong Jingyi vs. Baoshan Iron Steel | Guangdong Jingyi 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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