Correlation Between Shanghai Yanpu and Hefei Metalforming
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By analyzing existing cross correlation between Shanghai Yanpu Metal and Hefei Metalforming Mach, you can compare the effects of market volatilities on Shanghai Yanpu and Hefei Metalforming 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 Hefei Metalforming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yanpu and Hefei Metalforming.
Diversification Opportunities for Shanghai Yanpu and Hefei Metalforming
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Hefei is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yanpu Metal and Hefei Metalforming Mach in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hefei Metalforming Mach 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 Hefei Metalforming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hefei Metalforming Mach has no effect on the direction of Shanghai Yanpu i.e., Shanghai Yanpu and Hefei Metalforming go up and down completely randomly.
Pair Corralation between Shanghai Yanpu and Hefei Metalforming
Assuming the 90 days trading horizon Shanghai Yanpu Metal is expected to under-perform the Hefei Metalforming. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Yanpu Metal is 1.99 times less risky than Hefei Metalforming. The stock trades about -0.22 of its potential returns per unit of risk. The Hefei Metalforming Mach is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 751.00 in Hefei Metalforming Mach on August 27, 2024 and sell it today you would earn a total of 57.00 from holding Hefei Metalforming Mach or generate 7.59% 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. Hefei Metalforming Mach
Performance |
| Timeline |
| Shanghai Yanpu Metal |
| Hefei Metalforming Mach |
Shanghai Yanpu and Hefei Metalforming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Yanpu and Hefei Metalforming
The main advantage of trading using opposite Shanghai Yanpu and Hefei Metalforming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yanpu position performs unexpectedly, Hefei Metalforming 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 Hefei Metalforming will offset losses from the drop in Hefei Metalforming'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 |
| Hefei Metalforming vs. Biwin Storage Technology | Hefei Metalforming vs. PetroChina Co Ltd | Hefei Metalforming vs. Industrial and Commercial | Hefei Metalforming vs. China Construction Bank |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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