Correlation Between Shanghai Yanpu and Hunan Mendale
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By analyzing existing cross correlation between Shanghai Yanpu Metal and Hunan Mendale Hometextile, you can compare the effects of market volatilities on Shanghai Yanpu and Hunan Mendale 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 Hunan Mendale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yanpu and Hunan Mendale.
Diversification Opportunities for Shanghai Yanpu and Hunan Mendale
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shanghai and Hunan is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yanpu Metal and Hunan Mendale Hometextile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Mendale Hometextile 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 Hunan Mendale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Mendale Hometextile has no effect on the direction of Shanghai Yanpu i.e., Shanghai Yanpu and Hunan Mendale go up and down completely randomly.
Pair Corralation between Shanghai Yanpu and Hunan Mendale
Assuming the 90 days trading horizon Shanghai Yanpu is expected to generate 1.53 times less return on investment than Hunan Mendale. But when comparing it to its historical volatility, Shanghai Yanpu Metal is 1.58 times less risky than Hunan Mendale. It trades about 0.13 of its potential returns per unit of risk. Hunan Mendale Hometextile is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 198.00 in Hunan Mendale Hometextile on November 2, 2024 and sell it today you would earn a total of 111.00 from holding Hunan Mendale Hometextile or generate 56.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Yanpu Metal vs. Hunan Mendale Hometextile
Performance |
| Timeline |
| Shanghai Yanpu Metal |
| Hunan Mendale Hometextile |
Shanghai Yanpu and Hunan Mendale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Yanpu and Hunan Mendale
The main advantage of trading using opposite Shanghai Yanpu and Hunan Mendale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yanpu position performs unexpectedly, Hunan Mendale 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 Hunan Mendale will offset losses from the drop in Hunan Mendale's long position.| Shanghai Yanpu vs. Sublime China Information | Shanghai Yanpu vs. Invengo Information Technology | Shanghai Yanpu vs. Uroica Mining Safety | Shanghai Yanpu vs. Zijin Mining Group |
| Hunan Mendale vs. Guangdong Wens Foodstuff | Hunan Mendale vs. Pinlive Foods Co | Hunan Mendale vs. Beijing Kingsoft Office | Hunan Mendale vs. Fiberhome Telecommunication Technologies |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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