Correlation Between Xiangyang Automobile and Rongsheng Petrochemical
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By analyzing existing cross correlation between Xiangyang Automobile Bearing and Rongsheng Petrochemical Co, you can compare the effects of market volatilities on Xiangyang Automobile and Rongsheng Petrochemical 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 Xiangyang Automobile with a short position of Rongsheng Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiangyang Automobile and Rongsheng Petrochemical.
Diversification Opportunities for Xiangyang Automobile and Rongsheng Petrochemical
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xiangyang and Rongsheng is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Xiangyang Automobile Bearing and Rongsheng Petrochemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rongsheng Petrochemical and Xiangyang Automobile 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 Xiangyang Automobile Bearing are associated (or correlated) with Rongsheng Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rongsheng Petrochemical has no effect on the direction of Xiangyang Automobile i.e., Xiangyang Automobile and Rongsheng Petrochemical go up and down completely randomly.
Pair Corralation between Xiangyang Automobile and Rongsheng Petrochemical
Assuming the 90 days trading horizon Xiangyang Automobile Bearing is expected to generate 2.46 times more return on investment than Rongsheng Petrochemical. However, Xiangyang Automobile is 2.46 times more volatile than Rongsheng Petrochemical Co. It trades about 0.09 of its potential returns per unit of risk. Rongsheng Petrochemical Co is currently generating about 0.04 per unit of risk. If you would invest 564.00 in Xiangyang Automobile Bearing on September 1, 2024 and sell it today you would earn a total of 35.00 from holding Xiangyang Automobile Bearing or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiangyang Automobile Bearing vs. Rongsheng Petrochemical Co
Performance |
| Timeline |
| Xiangyang Automobile |
| Rongsheng Petrochemical |
Xiangyang Automobile and Rongsheng Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiangyang Automobile and Rongsheng Petrochemical
The main advantage of trading using opposite Xiangyang Automobile and Rongsheng Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiangyang Automobile position performs unexpectedly, Rongsheng Petrochemical 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 Rongsheng Petrochemical will offset losses from the drop in Rongsheng Petrochemical's long position.| Xiangyang Automobile vs. BYD Co Ltd | Xiangyang Automobile vs. China Mobile Limited | Xiangyang Automobile vs. Agricultural Bank of | Xiangyang Automobile vs. Industrial and Commercial |
| Rongsheng Petrochemical vs. Zijin Mining Group | Rongsheng Petrochemical vs. Wanhua Chemical Group | Rongsheng Petrochemical vs. Baoshan Iron Steel | Rongsheng Petrochemical 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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