Correlation Between Sino-Platinum Metals and Gansu Yasheng
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By analyzing existing cross correlation between Sino Platinum Metals Co and Gansu Yasheng Industrial, you can compare the effects of market volatilities on Sino-Platinum Metals and Gansu Yasheng 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 Sino-Platinum Metals with a short position of Gansu Yasheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino-Platinum Metals and Gansu Yasheng.
Diversification Opportunities for Sino-Platinum Metals and Gansu Yasheng
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sino-Platinum and Gansu is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Sino Platinum Metals Co and Gansu Yasheng Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gansu Yasheng Industrial and Sino-Platinum Metals 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 Sino Platinum Metals Co are associated (or correlated) with Gansu Yasheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gansu Yasheng Industrial has no effect on the direction of Sino-Platinum Metals i.e., Sino-Platinum Metals and Gansu Yasheng go up and down completely randomly.
Pair Corralation between Sino-Platinum Metals and Gansu Yasheng
Assuming the 90 days trading horizon Sino Platinum Metals Co is expected to generate 1.17 times more return on investment than Gansu Yasheng. However, Sino-Platinum Metals is 1.17 times more volatile than Gansu Yasheng Industrial. It trades about 0.01 of its potential returns per unit of risk. Gansu Yasheng Industrial is currently generating about 0.01 per unit of risk. If you would invest 1,418 in Sino Platinum Metals Co on September 11, 2024 and sell it today you would lose (3.00) from holding Sino Platinum Metals Co or give up 0.21% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Sino Platinum Metals Co vs. Gansu Yasheng Industrial
Performance |
Timeline |
Sino Platinum Metals |
Gansu Yasheng Industrial |
Sino-Platinum Metals and Gansu Yasheng Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sino-Platinum Metals and Gansu Yasheng
The main advantage of trading using opposite Sino-Platinum Metals and Gansu Yasheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sino-Platinum Metals position performs unexpectedly, Gansu Yasheng 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 Gansu Yasheng will offset losses from the drop in Gansu Yasheng's long position.The idea behind Sino Platinum Metals Co and Gansu Yasheng Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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