Correlation Between Shanghai Yanpu and Hunan Tyen
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By analyzing existing cross correlation between Shanghai Yanpu Metal and Hunan Tyen Machinery, you can compare the effects of market volatilities on Shanghai Yanpu and Hunan Tyen 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 Tyen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yanpu and Hunan Tyen.
Diversification Opportunities for Shanghai Yanpu and Hunan Tyen
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shanghai and Hunan is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yanpu Metal and Hunan Tyen Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Tyen Machinery 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 Tyen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Tyen Machinery has no effect on the direction of Shanghai Yanpu i.e., Shanghai Yanpu and Hunan Tyen go up and down completely randomly.
Pair Corralation between Shanghai Yanpu and Hunan Tyen
Assuming the 90 days trading horizon Shanghai Yanpu Metal is expected to under-perform the Hunan Tyen. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Yanpu Metal is 1.77 times less risky than Hunan Tyen. The stock trades about -0.02 of its potential returns per unit of risk. The Hunan Tyen Machinery is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 495.00 in Hunan Tyen Machinery on August 25, 2024 and sell it today you would earn a total of 15.00 from holding Hunan Tyen Machinery or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Yanpu Metal vs. Hunan Tyen Machinery
Performance |
| Timeline |
| Shanghai Yanpu Metal |
| Hunan Tyen Machinery |
Shanghai Yanpu and Hunan Tyen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Yanpu and Hunan Tyen
The main advantage of trading using opposite Shanghai Yanpu and Hunan Tyen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yanpu position performs unexpectedly, Hunan Tyen 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 Tyen will offset losses from the drop in Hunan Tyen's long position.| Shanghai Yanpu vs. Kweichow Moutai Co | Shanghai Yanpu vs. Contemporary Amperex Technology | Shanghai Yanpu vs. G bits Network Technology | Shanghai Yanpu vs. Beijing Roborock Technology |
| Hunan Tyen vs. Kweichow Moutai Co | Hunan Tyen vs. Contemporary Amperex Technology | Hunan Tyen vs. G bits Network Technology | Hunan Tyen vs. Beijing Roborock Technology |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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