Correlation Between Shanghai Yanpu and China Railway
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By analyzing existing cross correlation between Shanghai Yanpu Metal and China Railway Construction, you can compare the effects of market volatilities on Shanghai Yanpu and China Railway 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 China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yanpu and China Railway.
Diversification Opportunities for Shanghai Yanpu and China Railway
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shanghai and China is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yanpu Metal and China Railway Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Constr 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 China Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Constr has no effect on the direction of Shanghai Yanpu i.e., Shanghai Yanpu and China Railway go up and down completely randomly.
Pair Corralation between Shanghai Yanpu and China Railway
Assuming the 90 days trading horizon Shanghai Yanpu Metal is expected to generate 2.95 times more return on investment than China Railway. However, Shanghai Yanpu is 2.95 times more volatile than China Railway Construction. It trades about 0.2 of its potential returns per unit of risk. China Railway Construction is currently generating about 0.12 per unit of risk. If you would invest 3,768 in Shanghai Yanpu Metal on December 8, 2024 and sell it today you would earn a total of 545.00 from holding Shanghai Yanpu Metal or generate 14.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Yanpu Metal vs. China Railway Construction
Performance |
| Timeline |
| Shanghai Yanpu Metal |
| China Railway Constr |
Shanghai Yanpu and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Yanpu and China Railway
The main advantage of trading using opposite Shanghai Yanpu and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yanpu position performs unexpectedly, China Railway 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 China Railway will offset losses from the drop in China Railway's long position.| Shanghai Yanpu vs. Beingmate Baby Child | ||
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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