Correlation Between Shanghai Yanpu and Jiujiang Shanshui
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By analyzing existing cross correlation between Shanghai Yanpu Metal and Jiujiang Shanshui Technology, you can compare the effects of market volatilities on Shanghai Yanpu and Jiujiang Shanshui 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 Jiujiang Shanshui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yanpu and Jiujiang Shanshui.
Diversification Opportunities for Shanghai Yanpu and Jiujiang Shanshui
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Jiujiang is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yanpu Metal and Jiujiang Shanshui Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiujiang Shanshui 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 Jiujiang Shanshui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiujiang Shanshui has no effect on the direction of Shanghai Yanpu i.e., Shanghai Yanpu and Jiujiang Shanshui go up and down completely randomly.
Pair Corralation between Shanghai Yanpu and Jiujiang Shanshui
Assuming the 90 days trading horizon Shanghai Yanpu Metal is expected to generate 0.96 times more return on investment than Jiujiang Shanshui. However, Shanghai Yanpu Metal is 1.05 times less risky than Jiujiang Shanshui. It trades about -0.15 of its potential returns per unit of risk. Jiujiang Shanshui Technology is currently generating about -0.28 per unit of risk. If you would invest 3,822 in Shanghai Yanpu Metal on October 12, 2024 and sell it today you would lose (225.00) from holding Shanghai Yanpu Metal or give up 5.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Yanpu Metal vs. Jiujiang Shanshui Technology
Performance |
| Timeline |
| Shanghai Yanpu Metal |
| Jiujiang Shanshui |
Shanghai Yanpu and Jiujiang Shanshui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Yanpu and Jiujiang Shanshui
The main advantage of trading using opposite Shanghai Yanpu and Jiujiang Shanshui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yanpu position performs unexpectedly, Jiujiang Shanshui 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 Jiujiang Shanshui will offset losses from the drop in Jiujiang Shanshui's long position.| Shanghai Yanpu vs. Beijing Kingsoft Office | Shanghai Yanpu vs. Fuzhou Rockchip Electronics | Shanghai Yanpu vs. Jinlong Machinery Electronic | Shanghai Yanpu vs. Weihai Honglin Electronic |
| Jiujiang Shanshui vs. China Eastern Airlines | Jiujiang Shanshui vs. Soyea Technology Co | Jiujiang Shanshui vs. MayAir Technology Co | Jiujiang Shanshui vs. Holitech Technology 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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