Correlation Between Jiaozuo Wanfang and Rongsheng Petrochemical
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By analyzing existing cross correlation between Jiaozuo Wanfang Aluminum and Rongsheng Petrochemical Co, you can compare the effects of market volatilities on Jiaozuo Wanfang and Rongsheng Petrochemical 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 Jiaozuo Wanfang with a short position of Rongsheng Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiaozuo Wanfang and Rongsheng Petrochemical.
Diversification Opportunities for Jiaozuo Wanfang and Rongsheng Petrochemical
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jiaozuo and Rongsheng is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Jiaozuo Wanfang Aluminum and Rongsheng Petrochemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rongsheng Petrochemical and Jiaozuo Wanfang 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 Jiaozuo Wanfang Aluminum are associated (or correlated) with Rongsheng Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rongsheng Petrochemical has no effect on the direction of Jiaozuo Wanfang i.e., Jiaozuo Wanfang and Rongsheng Petrochemical go up and down completely randomly.
Pair Corralation between Jiaozuo Wanfang and Rongsheng Petrochemical
Assuming the 90 days trading horizon Jiaozuo Wanfang Aluminum is expected to generate 1.81 times more return on investment than Rongsheng Petrochemical. However, Jiaozuo Wanfang is 1.81 times more volatile than Rongsheng Petrochemical Co. It trades about 0.25 of its potential returns per unit of risk. Rongsheng Petrochemical Co is currently generating about 0.01 per unit of risk. If you would invest 716.00 in Jiaozuo Wanfang Aluminum on November 27, 2024 and sell it today you would earn a total of 38.00 from holding Jiaozuo Wanfang Aluminum or generate 5.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiaozuo Wanfang Aluminum vs. Rongsheng Petrochemical Co
Performance |
| Timeline |
| Jiaozuo Wanfang Aluminum |
| Rongsheng Petrochemical |
Jiaozuo Wanfang and Rongsheng Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiaozuo Wanfang and Rongsheng Petrochemical
The main advantage of trading using opposite Jiaozuo Wanfang and Rongsheng Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiaozuo Wanfang position performs unexpectedly, Rongsheng Petrochemical 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 Rongsheng Petrochemical will offset losses from the drop in Rongsheng Petrochemical's long position.| Jiaozuo Wanfang vs. Huawen Media Investment | Jiaozuo Wanfang vs. Xian International Medical | Jiaozuo Wanfang vs. Guangdong Transtek Medical | Jiaozuo Wanfang vs. Thinkingdom Media Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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