Correlation Between Shanghai Yanpu and Tibet Huayu
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By analyzing existing cross correlation between Shanghai Yanpu Metal and Tibet Huayu Mining, you can compare the effects of market volatilities on Shanghai Yanpu and Tibet Huayu 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 Tibet Huayu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yanpu and Tibet Huayu.
Diversification Opportunities for Shanghai Yanpu and Tibet Huayu
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Tibet is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yanpu Metal and Tibet Huayu Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tibet Huayu Mining 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 Tibet Huayu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tibet Huayu Mining has no effect on the direction of Shanghai Yanpu i.e., Shanghai Yanpu and Tibet Huayu go up and down completely randomly.
Pair Corralation between Shanghai Yanpu and Tibet Huayu
Assuming the 90 days trading horizon Shanghai Yanpu is expected to generate 1.65 times less return on investment than Tibet Huayu. But when comparing it to its historical volatility, Shanghai Yanpu Metal is 1.14 times less risky than Tibet Huayu. It trades about 0.02 of its potential returns per unit of risk. Tibet Huayu Mining is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,214 in Tibet Huayu Mining on September 1, 2024 and sell it today you would earn a total of 225.00 from holding Tibet Huayu Mining or generate 18.53% 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. Tibet Huayu Mining
Performance |
| Timeline |
| Shanghai Yanpu Metal |
| Tibet Huayu Mining |
Shanghai Yanpu and Tibet Huayu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Yanpu and Tibet Huayu
The main advantage of trading using opposite Shanghai Yanpu and Tibet Huayu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yanpu position performs unexpectedly, Tibet Huayu 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 Tibet Huayu will offset losses from the drop in Tibet Huayu's long position.| Shanghai Yanpu vs. BYD Co Ltd | Shanghai Yanpu vs. China Mobile Limited | Shanghai Yanpu vs. Agricultural Bank of | Shanghai Yanpu vs. Industrial and Commercial |
| Tibet Huayu vs. Zijin Mining Group | Tibet Huayu vs. Wanhua Chemical Group | Tibet Huayu vs. Baoshan Iron Steel | Tibet Huayu vs. Shandong Gold Mining |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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