Correlation Between Shanghai Yanpu and TianJin 712
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By analyzing existing cross correlation between Shanghai Yanpu Metal and TianJin 712 Communication, you can compare the effects of market volatilities on Shanghai Yanpu and TianJin 712 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 TianJin 712. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yanpu and TianJin 712.
Diversification Opportunities for Shanghai Yanpu and TianJin 712
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and TianJin is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yanpu Metal and TianJin 712 Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TianJin 712 Communication 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 TianJin 712. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TianJin 712 Communication has no effect on the direction of Shanghai Yanpu i.e., Shanghai Yanpu and TianJin 712 go up and down completely randomly.
Pair Corralation between Shanghai Yanpu and TianJin 712
Assuming the 90 days trading horizon Shanghai Yanpu is expected to generate 1.32 times less return on investment than TianJin 712. But when comparing it to its historical volatility, Shanghai Yanpu Metal is 1.42 times less risky than TianJin 712. It trades about 0.27 of its potential returns per unit of risk. TianJin 712 Communication is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,735 in TianJin 712 Communication on September 18, 2024 and sell it today you would earn a total of 386.00 from holding TianJin 712 Communication or generate 22.25% 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. TianJin 712 Communication
Performance |
| Timeline |
| Shanghai Yanpu Metal |
| TianJin 712 Communication |
Shanghai Yanpu and TianJin 712 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Yanpu and TianJin 712
The main advantage of trading using opposite Shanghai Yanpu and TianJin 712 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yanpu position performs unexpectedly, TianJin 712 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 TianJin 712 will offset losses from the drop in TianJin 712's long position.| Shanghai Yanpu vs. BeiGene | Shanghai Yanpu vs. Kweichow Moutai Co | Shanghai Yanpu vs. Beijing Roborock Technology | Shanghai Yanpu vs. G bits Network Technology |
| TianJin 712 vs. Industrial and Commercial | TianJin 712 vs. China Construction Bank | TianJin 712 vs. Bank of China | TianJin 712 vs. Agricultural Bank of |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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