Correlation Between Shenyang Chemical and Guangdong Jingyi
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By analyzing existing cross correlation between Shenyang Chemical Industry and Guangdong Jingyi Metal, you can compare the effects of market volatilities on Shenyang Chemical and Guangdong Jingyi 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 Shenyang Chemical with a short position of Guangdong Jingyi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Chemical and Guangdong Jingyi.
Diversification Opportunities for Shenyang Chemical and Guangdong Jingyi
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shenyang and Guangdong is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Chemical Industry and Guangdong Jingyi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Jingyi Metal and Shenyang Chemical 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 Shenyang Chemical Industry are associated (or correlated) with Guangdong Jingyi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Jingyi Metal has no effect on the direction of Shenyang Chemical i.e., Shenyang Chemical and Guangdong Jingyi go up and down completely randomly.
Pair Corralation between Shenyang Chemical and Guangdong Jingyi
Assuming the 90 days trading horizon Shenyang Chemical Industry is expected to under-perform the Guangdong Jingyi. In addition to that, Shenyang Chemical is 1.55 times more volatile than Guangdong Jingyi Metal. It trades about -0.1 of its total potential returns per unit of risk. Guangdong Jingyi Metal is currently generating about -0.04 per unit of volatility. If you would invest 720.00 in Guangdong Jingyi Metal on September 25, 2024 and sell it today you would lose (19.00) from holding Guangdong Jingyi Metal or give up 2.64% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Shenyang Chemical Industry vs. Guangdong Jingyi Metal
Performance |
Timeline |
Shenyang Chemical |
Guangdong Jingyi Metal |
Shenyang Chemical and Guangdong Jingyi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shenyang Chemical and Guangdong Jingyi
The main advantage of trading using opposite Shenyang Chemical and Guangdong Jingyi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Chemical position performs unexpectedly, Guangdong Jingyi 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 Guangdong Jingyi will offset losses from the drop in Guangdong Jingyi's long position.Shenyang Chemical vs. Zijin Mining Group | Shenyang Chemical vs. Wanhua Chemical Group | Shenyang Chemical vs. Baoshan Iron Steel | Shenyang Chemical vs. Shandong Gold Mining |
Guangdong Jingyi vs. Zijin Mining Group | Guangdong Jingyi vs. Wanhua Chemical Group | Guangdong Jingyi vs. Baoshan Iron Steel | Guangdong Jingyi vs. Shandong Gold Mining |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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