Correlation Between Maoming Petro and Guangdong Liantai
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By analyzing existing cross correlation between Maoming Petro Chemical Shihua and Guangdong Liantai Environmental, you can compare the effects of market volatilities on Maoming Petro and Guangdong Liantai 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 Guangdong Liantai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maoming Petro and Guangdong Liantai.
Diversification Opportunities for Maoming Petro and Guangdong Liantai
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Maoming and Guangdong is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Maoming Petro Chemical Shihua and Guangdong Liantai Environmenta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Liantai 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 Guangdong Liantai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Liantai has no effect on the direction of Maoming Petro i.e., Maoming Petro and Guangdong Liantai go up and down completely randomly.
Pair Corralation between Maoming Petro and Guangdong Liantai
Assuming the 90 days trading horizon Maoming Petro Chemical Shihua is expected to under-perform the Guangdong Liantai. In addition to that, Maoming Petro is 1.18 times more volatile than Guangdong Liantai Environmental. It trades about -0.02 of its total potential returns per unit of risk. Guangdong Liantai Environmental is currently generating about -0.01 per unit of volatility. If you would invest 551.00 in Guangdong Liantai Environmental on September 3, 2024 and sell it today you would lose (114.00) from holding Guangdong Liantai Environmental or give up 20.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maoming Petro Chemical Shihua vs. Guangdong Liantai Environmenta
Performance |
| Timeline |
| Maoming Petro Chemical |
| Guangdong Liantai |
Maoming Petro and Guangdong Liantai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maoming Petro and Guangdong Liantai
The main advantage of trading using opposite Maoming Petro and Guangdong Liantai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maoming Petro position performs unexpectedly, Guangdong Liantai 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 Guangdong Liantai will offset losses from the drop in Guangdong Liantai's long position.| Maoming Petro vs. Zijin Mining Group | Maoming Petro vs. Baoshan Iron Steel | Maoming Petro vs. Hoshine Silicon Ind |
| Guangdong Liantai vs. Touchstone International Medical | Guangdong Liantai vs. Gansu Jiu Steel | Guangdong Liantai vs. Hubei Xingfa Chemicals | Guangdong Liantai vs. Fujian Nanwang Environment |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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