Correlation Between Maoming Petro and Shandong Longquan
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By analyzing existing cross correlation between Maoming Petro Chemical Shihua and Shandong Longquan Pipeline, you can compare the effects of market volatilities on Maoming Petro and Shandong Longquan 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 Shandong Longquan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maoming Petro and Shandong Longquan.
Diversification Opportunities for Maoming Petro and Shandong Longquan
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Maoming and Shandong is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Maoming Petro Chemical Shihua and Shandong Longquan Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Longquan 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 Shandong Longquan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Longquan has no effect on the direction of Maoming Petro i.e., Maoming Petro and Shandong Longquan go up and down completely randomly.
Pair Corralation between Maoming Petro and Shandong Longquan
Assuming the 90 days trading horizon Maoming Petro Chemical Shihua is expected to under-perform the Shandong Longquan. In addition to that, Maoming Petro is 1.14 times more volatile than Shandong Longquan Pipeline. It trades about -0.01 of its total potential returns per unit of risk. Shandong Longquan Pipeline is currently generating about 0.05 per unit of volatility. If you would invest 460.00 in Shandong Longquan Pipeline on October 26, 2024 and sell it today you would earn a total of 27.00 from holding Shandong Longquan Pipeline or generate 5.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maoming Petro Chemical Shihua vs. Shandong Longquan Pipeline
Performance |
| Timeline |
| Maoming Petro Chemical |
| Shandong Longquan |
Maoming Petro and Shandong Longquan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maoming Petro and Shandong Longquan
The main advantage of trading using opposite Maoming Petro and Shandong Longquan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maoming Petro position performs unexpectedly, Shandong Longquan 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 Shandong Longquan will offset losses from the drop in Shandong Longquan'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 |
| Shandong Longquan vs. Zijin Mining Group | Shandong Longquan vs. Wanhua Chemical Group | Shandong Longquan vs. Baoshan Iron Steel | Shandong Longquan 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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