Correlation Between Shanghai Yanpu and Sichuan Yahua
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By analyzing existing cross correlation between Shanghai Yanpu Metal and Sichuan Yahua Industrial, you can compare the effects of market volatilities on Shanghai Yanpu and Sichuan Yahua 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 Sichuan Yahua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yanpu and Sichuan Yahua.
Diversification Opportunities for Shanghai Yanpu and Sichuan Yahua
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Sichuan is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yanpu Metal and Sichuan Yahua Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Yahua Industrial 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 Sichuan Yahua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Yahua Industrial has no effect on the direction of Shanghai Yanpu i.e., Shanghai Yanpu and Sichuan Yahua go up and down completely randomly.
Pair Corralation between Shanghai Yanpu and Sichuan Yahua
Assuming the 90 days trading horizon Shanghai Yanpu Metal is expected to generate 1.13 times more return on investment than Sichuan Yahua. However, Shanghai Yanpu is 1.13 times more volatile than Sichuan Yahua Industrial. It trades about 0.01 of its potential returns per unit of risk. Sichuan Yahua Industrial is currently generating about -0.04 per unit of risk. If you would invest 3,684 in Shanghai Yanpu Metal on October 16, 2024 and sell it today you would earn a total of 40.00 from holding Shanghai Yanpu Metal or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Yanpu Metal vs. Sichuan Yahua Industrial
Performance |
| Timeline |
| Shanghai Yanpu Metal |
| Sichuan Yahua Industrial |
Shanghai Yanpu and Sichuan Yahua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Yanpu and Sichuan Yahua
The main advantage of trading using opposite Shanghai Yanpu and Sichuan Yahua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yanpu position performs unexpectedly, Sichuan Yahua 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 Sichuan Yahua will offset losses from the drop in Sichuan Yahua's long position.| Shanghai Yanpu vs. Guangdong Shenglu Telecommunication | Shanghai Yanpu vs. Suzhou Industrial Park | Shanghai Yanpu vs. Allwin Telecommunication Co | Shanghai Yanpu vs. Sunwave Communications Co |
| Sichuan Yahua vs. Shenzhen Bioeasy Biotechnology | Sichuan Yahua vs. Heilongjiang Publishing Media | Sichuan Yahua vs. Southern PublishingMedia Co | Sichuan Yahua vs. Changchun BCHT Biotechnology |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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