Correlation Between Maoming Petro and Jiaozuo Wanfang
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By analyzing existing cross correlation between Maoming Petro Chemical Shihua and Jiaozuo Wanfang Aluminum, you can compare the effects of market volatilities on Maoming Petro and Jiaozuo Wanfang 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 Maoming Petro with a short position of Jiaozuo Wanfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maoming Petro and Jiaozuo Wanfang.
Diversification Opportunities for Maoming Petro and Jiaozuo Wanfang
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Maoming and Jiaozuo is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Maoming Petro Chemical Shihua and Jiaozuo Wanfang Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiaozuo Wanfang Aluminum and Maoming Petro 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 Maoming Petro Chemical Shihua are associated (or correlated) with Jiaozuo Wanfang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiaozuo Wanfang Aluminum has no effect on the direction of Maoming Petro i.e., Maoming Petro and Jiaozuo Wanfang go up and down completely randomly.
Pair Corralation between Maoming Petro and Jiaozuo Wanfang
Assuming the 90 days trading horizon Maoming Petro Chemical Shihua is expected to generate 1.03 times more return on investment than Jiaozuo Wanfang. However, Maoming Petro is 1.03 times more volatile than Jiaozuo Wanfang Aluminum. It trades about -0.01 of its potential returns per unit of risk. Jiaozuo Wanfang Aluminum is currently generating about -0.04 per unit of risk. If you would invest 374.00 in Maoming Petro Chemical Shihua on October 26, 2024 and sell it today you would lose (14.00) from holding Maoming Petro Chemical Shihua or give up 3.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maoming Petro Chemical Shihua vs. Jiaozuo Wanfang Aluminum
Performance |
| Timeline |
| Maoming Petro Chemical |
| Jiaozuo Wanfang Aluminum |
Maoming Petro and Jiaozuo Wanfang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maoming Petro and Jiaozuo Wanfang
The main advantage of trading using opposite Maoming Petro and Jiaozuo Wanfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maoming Petro position performs unexpectedly, Jiaozuo Wanfang 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 Jiaozuo Wanfang will offset losses from the drop in Jiaozuo Wanfang's long position.| Maoming Petro vs. Fibocom Wireless | Maoming Petro vs. Jilin Jlu Communication | Maoming Petro vs. Beijing Bewinner Communications | Maoming Petro vs. China Mobile Limited |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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