Correlation Between Shanghai Yanpu and Guangzhou Fangbang
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By analyzing existing cross correlation between Shanghai Yanpu Metal and Guangzhou Fangbang Electronics, you can compare the effects of market volatilities on Shanghai Yanpu and Guangzhou Fangbang 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 Guangzhou Fangbang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yanpu and Guangzhou Fangbang.
Diversification Opportunities for Shanghai Yanpu and Guangzhou Fangbang
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shanghai and Guangzhou is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yanpu Metal and Guangzhou Fangbang Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Fangbang 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 Guangzhou Fangbang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Fangbang has no effect on the direction of Shanghai Yanpu i.e., Shanghai Yanpu and Guangzhou Fangbang go up and down completely randomly.
Pair Corralation between Shanghai Yanpu and Guangzhou Fangbang
Assuming the 90 days trading horizon Shanghai Yanpu Metal is expected to generate 0.68 times more return on investment than Guangzhou Fangbang. However, Shanghai Yanpu Metal is 1.46 times less risky than Guangzhou Fangbang. It trades about 0.01 of its potential returns per unit of risk. Guangzhou Fangbang Electronics is currently generating about 0.0 per unit of risk. If you would invest 3,684 in Shanghai Yanpu Metal on October 16, 2024 and sell it today you would earn a total of 40.00 from holding Shanghai Yanpu Metal or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Yanpu Metal vs. Guangzhou Fangbang Electronics
Performance |
| Timeline |
| Shanghai Yanpu Metal |
| Guangzhou Fangbang |
Shanghai Yanpu and Guangzhou Fangbang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Yanpu and Guangzhou Fangbang
The main advantage of trading using opposite Shanghai Yanpu and Guangzhou Fangbang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yanpu position performs unexpectedly, Guangzhou Fangbang 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 Guangzhou Fangbang will offset losses from the drop in Guangzhou Fangbang's long position.| Shanghai Yanpu vs. Guangdong Shenglu Telecommunication | Shanghai Yanpu vs. Suzhou Industrial Park | Shanghai Yanpu vs. Allwin Telecommunication Co | Shanghai Yanpu vs. Sunwave Communications Co |
| Guangzhou Fangbang vs. Universal Scientific Industrial | Guangzhou Fangbang vs. Jiaozuo Wanfang Aluminum | Guangzhou Fangbang vs. Porton Fine Chemicals | Guangzhou Fangbang vs. Shanghai Yanpu Metal |
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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