Correlation Between Shanghai Yanpu and Anhui Fuhuang
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By analyzing existing cross correlation between Shanghai Yanpu Metal and Anhui Fuhuang Steel, you can compare the effects of market volatilities on Shanghai Yanpu and Anhui Fuhuang 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 Anhui Fuhuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yanpu and Anhui Fuhuang.
Diversification Opportunities for Shanghai Yanpu and Anhui Fuhuang
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shanghai and Anhui is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yanpu Metal and Anhui Fuhuang Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Fuhuang Steel 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 Anhui Fuhuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Fuhuang Steel has no effect on the direction of Shanghai Yanpu i.e., Shanghai Yanpu and Anhui Fuhuang go up and down completely randomly.
Pair Corralation between Shanghai Yanpu and Anhui Fuhuang
Assuming the 90 days trading horizon Shanghai Yanpu Metal is expected to generate 1.01 times more return on investment than Anhui Fuhuang. However, Shanghai Yanpu is 1.01 times more volatile than Anhui Fuhuang Steel. It trades about 0.05 of its potential returns per unit of risk. Anhui Fuhuang Steel is currently generating about 0.03 per unit of risk. If you would invest 2,305 in Shanghai Yanpu Metal on January 24, 2025 and sell it today you would earn a total of 1,761 from holding Shanghai Yanpu Metal or generate 76.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
Shanghai Yanpu Metal vs. Anhui Fuhuang Steel
Performance |
| Timeline |
| Shanghai Yanpu Metal |
| Anhui Fuhuang Steel |
Shanghai Yanpu and Anhui Fuhuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Yanpu and Anhui Fuhuang
The main advantage of trading using opposite Shanghai Yanpu and Anhui Fuhuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yanpu position performs unexpectedly, Anhui Fuhuang 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 Anhui Fuhuang will offset losses from the drop in Anhui Fuhuang's long position.| Shanghai Yanpu vs. Hubeiyichang Transportation Group | Shanghai Yanpu vs. Jiangsu Jinling Sports | Shanghai Yanpu vs. Sunny Loan Top | Shanghai Yanpu vs. Beijing Balance Medical |
| Anhui Fuhuang vs. Wuxi Chemical Equipment | Anhui Fuhuang vs. Fujian Anjoy Foods | Anhui Fuhuang vs. Muyuan Foodstuff Co | Anhui Fuhuang vs. North Chemical Industries |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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