Correlation Between Maoming Petro and Shandong Sanyuan
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By analyzing existing cross correlation between Maoming Petro Chemical Shihua and Shandong Sanyuan Biotechnology, you can compare the effects of market volatilities on Maoming Petro and Shandong Sanyuan 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 Sanyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maoming Petro and Shandong Sanyuan.
Diversification Opportunities for Maoming Petro and Shandong Sanyuan
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Maoming and Shandong is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Maoming Petro Chemical Shihua and Shandong Sanyuan Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Sanyuan Bio 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 Sanyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Sanyuan Bio has no effect on the direction of Maoming Petro i.e., Maoming Petro and Shandong Sanyuan go up and down completely randomly.
Pair Corralation between Maoming Petro and Shandong Sanyuan
Assuming the 90 days trading horizon Maoming Petro Chemical Shihua is expected to generate 1.64 times more return on investment than Shandong Sanyuan. However, Maoming Petro is 1.64 times more volatile than Shandong Sanyuan Biotechnology. It trades about 0.1 of its potential returns per unit of risk. Shandong Sanyuan Biotechnology is currently generating about -0.11 per unit of risk. If you would invest 374.00 in Maoming Petro Chemical Shihua on August 28, 2024 and sell it today you would earn a total of 22.00 from holding Maoming Petro Chemical Shihua or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maoming Petro Chemical Shihua vs. Shandong Sanyuan Biotechnology
Performance |
| Timeline |
| Maoming Petro Chemical |
| Shandong Sanyuan Bio |
Maoming Petro and Shandong Sanyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maoming Petro and Shandong Sanyuan
The main advantage of trading using opposite Maoming Petro and Shandong Sanyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maoming Petro position performs unexpectedly, Shandong Sanyuan 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 Sanyuan will offset losses from the drop in Shandong Sanyuan's long position.| Maoming Petro vs. Beijing Sanyuan Foods | Maoming Petro vs. Jiamei Food Packaging | Maoming Petro vs. Offshore Oil Engineering | Maoming Petro vs. Xiamen Bank Co |
| Shandong Sanyuan vs. New Hope Dairy | Shandong Sanyuan vs. Shandong Ruifeng Chemical | Shandong Sanyuan vs. Maoming Petro Chemical Shihua | Shandong Sanyuan vs. Yangmei Chemical Co |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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