Correlation Between Maoming Petro and Lianhe Chemical
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By analyzing existing cross correlation between Maoming Petro Chemical Shihua and Lianhe Chemical Technology, you can compare the effects of market volatilities on Maoming Petro and Lianhe Chemical 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 Lianhe Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maoming Petro and Lianhe Chemical.
Diversification Opportunities for Maoming Petro and Lianhe Chemical
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Maoming and Lianhe is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Maoming Petro Chemical Shihua and Lianhe Chemical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lianhe Chemical Tech 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 Lianhe Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lianhe Chemical Tech has no effect on the direction of Maoming Petro i.e., Maoming Petro and Lianhe Chemical go up and down completely randomly.
Pair Corralation between Maoming Petro and Lianhe Chemical
Assuming the 90 days trading horizon Maoming Petro Chemical Shihua is expected to under-perform the Lianhe Chemical. In addition to that, Maoming Petro is 1.07 times more volatile than Lianhe Chemical Technology. It trades about -0.01 of its total potential returns per unit of risk. Lianhe Chemical Technology is currently generating about -0.01 per unit of volatility. If you would invest 600.00 in Lianhe Chemical Technology on October 26, 2024 and sell it today you would lose (15.00) from holding Lianhe Chemical Technology or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maoming Petro Chemical Shihua vs. Lianhe Chemical Technology
Performance |
| Timeline |
| Maoming Petro Chemical |
| Lianhe Chemical Tech |
Maoming Petro and Lianhe Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maoming Petro and Lianhe Chemical
The main advantage of trading using opposite Maoming Petro and Lianhe Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maoming Petro position performs unexpectedly, Lianhe Chemical 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 Lianhe Chemical will offset losses from the drop in Lianhe Chemical'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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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