Correlation Between Shanghai Yanpu and CITIC Metal
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By analyzing existing cross correlation between Shanghai Yanpu Metal and CITIC Metal Co, you can compare the effects of market volatilities on Shanghai Yanpu and CITIC Metal 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 CITIC Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yanpu and CITIC Metal.
Diversification Opportunities for Shanghai Yanpu and CITIC Metal
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shanghai and CITIC is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yanpu Metal and CITIC Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Metal 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 CITIC Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Metal has no effect on the direction of Shanghai Yanpu i.e., Shanghai Yanpu and CITIC Metal go up and down completely randomly.
Pair Corralation between Shanghai Yanpu and CITIC Metal
Assuming the 90 days trading horizon Shanghai Yanpu Metal is expected to generate 2.26 times more return on investment than CITIC Metal. However, Shanghai Yanpu is 2.26 times more volatile than CITIC Metal Co. It trades about 0.08 of its potential returns per unit of risk. CITIC Metal Co is currently generating about -0.13 per unit of risk. If you would invest 3,694 in Shanghai Yanpu Metal on August 29, 2024 and sell it today you would earn a total of 173.00 from holding Shanghai Yanpu Metal or generate 4.68% 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. CITIC Metal Co
Performance |
| Timeline |
| Shanghai Yanpu Metal |
| CITIC Metal |
Shanghai Yanpu and CITIC Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Yanpu and CITIC Metal
The main advantage of trading using opposite Shanghai Yanpu and CITIC Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yanpu position performs unexpectedly, CITIC Metal 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 CITIC Metal will offset losses from the drop in CITIC Metal's long position.| Shanghai Yanpu vs. Loongson Technology Corp | Shanghai Yanpu vs. Chongqing Road Bridge | Shanghai Yanpu vs. Shenzhen Fortune Trend | Shanghai Yanpu vs. Wuhan Xianglong Power |
| CITIC Metal vs. Zijin Mining Group | CITIC Metal vs. Wanhua Chemical Group | CITIC Metal vs. Baoshan Iron Steel | CITIC Metal 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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