Correlation Between Shanghai Huayi and Rising Nonferrous
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By analyzing existing cross correlation between Shanghai Huayi Group and Rising Nonferrous Metals, you can compare the effects of market volatilities on Shanghai Huayi and Rising Nonferrous 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 Huayi with a short position of Rising Nonferrous. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Huayi and Rising Nonferrous.
Diversification Opportunities for Shanghai Huayi and Rising Nonferrous
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Rising is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Huayi Group and Rising Nonferrous Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rising Nonferrous Metals and Shanghai Huayi 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 Huayi Group are associated (or correlated) with Rising Nonferrous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rising Nonferrous Metals has no effect on the direction of Shanghai Huayi i.e., Shanghai Huayi and Rising Nonferrous go up and down completely randomly.
Pair Corralation between Shanghai Huayi and Rising Nonferrous
Assuming the 90 days trading horizon Shanghai Huayi Group is expected to generate 0.63 times more return on investment than Rising Nonferrous. However, Shanghai Huayi Group is 1.59 times less risky than Rising Nonferrous. It trades about 0.11 of its potential returns per unit of risk. Rising Nonferrous Metals is currently generating about -0.03 per unit of risk. If you would invest 54.00 in Shanghai Huayi Group on September 4, 2024 and sell it today you would earn a total of 2.00 from holding Shanghai Huayi Group or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Shanghai Huayi Group vs. Rising Nonferrous Metals
Performance |
| Timeline |
| Shanghai Huayi Group |
| Rising Nonferrous Metals |
Shanghai Huayi and Rising Nonferrous Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Huayi and Rising Nonferrous
The main advantage of trading using opposite Shanghai Huayi and Rising Nonferrous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Huayi position performs unexpectedly, Rising Nonferrous 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 Rising Nonferrous will offset losses from the drop in Rising Nonferrous' long position.| Shanghai Huayi vs. Rising Nonferrous Metals | Shanghai Huayi vs. Shanghai Yanpu Metal | Shanghai Huayi vs. Jiangsu GDK Biotechnology | Shanghai Huayi vs. Wuhan Hvsen Biotechnology |
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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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