Correlation Between Shanghai Yanpu and Shandong Ruifeng
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By analyzing existing cross correlation between Shanghai Yanpu Metal and Shandong Ruifeng Chemical, you can compare the effects of market volatilities on Shanghai Yanpu and Shandong Ruifeng 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 Shandong Ruifeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yanpu and Shandong Ruifeng.
Diversification Opportunities for Shanghai Yanpu and Shandong Ruifeng
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Shandong is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yanpu Metal and Shandong Ruifeng Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Ruifeng Chemical 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 Shandong Ruifeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Ruifeng Chemical has no effect on the direction of Shanghai Yanpu i.e., Shanghai Yanpu and Shandong Ruifeng go up and down completely randomly.
Pair Corralation between Shanghai Yanpu and Shandong Ruifeng
Assuming the 90 days trading horizon Shanghai Yanpu Metal is expected to generate 0.87 times more return on investment than Shandong Ruifeng. However, Shanghai Yanpu Metal is 1.15 times less risky than Shandong Ruifeng. It trades about 0.08 of its potential returns per unit of risk. Shandong Ruifeng Chemical is currently generating about -0.14 per unit of risk. If you would invest 3,767 in Shanghai Yanpu Metal on September 4, 2024 and sell it today you would earn a total of 169.00 from holding Shanghai Yanpu Metal or generate 4.49% 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. Shandong Ruifeng Chemical
Performance |
| Timeline |
| Shanghai Yanpu Metal |
| Shandong Ruifeng Chemical |
Shanghai Yanpu and Shandong Ruifeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Yanpu and Shandong Ruifeng
The main advantage of trading using opposite Shanghai Yanpu and Shandong Ruifeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yanpu position performs unexpectedly, Shandong Ruifeng 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 Shandong Ruifeng will offset losses from the drop in Shandong Ruifeng's long position.| Shanghai Yanpu vs. Dhc Software Co | Shanghai Yanpu vs. Inspur Software Co | Shanghai Yanpu vs. Keda Clean Energy | Shanghai Yanpu vs. Glodon Software Co |
| Shandong Ruifeng vs. CITIC Metal Co | Shandong Ruifeng vs. Shanghai Yanpu Metal | Shandong Ruifeng vs. Hangzhou Pinming Software | Shandong Ruifeng vs. Inspur Software 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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