Correlation Between Zhongshan Public and Rongsheng Petrochemical
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By analyzing existing cross correlation between Zhongshan Public Utilities and Rongsheng Petrochemical Co, you can compare the effects of market volatilities on Zhongshan Public 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 Zhongshan Public with a short position of Rongsheng Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongshan Public and Rongsheng Petrochemical.
Diversification Opportunities for Zhongshan Public and Rongsheng Petrochemical
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Zhongshan and Rongsheng is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Zhongshan Public Utilities and Rongsheng Petrochemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rongsheng Petrochemical and Zhongshan Public 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 Zhongshan Public Utilities 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 Zhongshan Public i.e., Zhongshan Public and Rongsheng Petrochemical go up and down completely randomly.
Pair Corralation between Zhongshan Public and Rongsheng Petrochemical
Assuming the 90 days trading horizon Zhongshan Public Utilities is expected to generate 1.23 times more return on investment than Rongsheng Petrochemical. However, Zhongshan Public is 1.23 times more volatile than Rongsheng Petrochemical Co. It trades about -0.22 of its potential returns per unit of risk. Rongsheng Petrochemical Co is currently generating about -0.4 per unit of risk. If you would invest 921.00 in Zhongshan Public Utilities on October 12, 2024 and sell it today you would lose (65.00) from holding Zhongshan Public Utilities or give up 7.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongshan Public Utilities vs. Rongsheng Petrochemical Co
Performance |
| Timeline |
| Zhongshan Public Uti |
| Rongsheng Petrochemical |
Zhongshan Public and Rongsheng Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongshan Public and Rongsheng Petrochemical
The main advantage of trading using opposite Zhongshan Public and Rongsheng Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongshan Public 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.| Zhongshan Public vs. Fiberhome Telecommunication Technologies | Zhongshan Public vs. AUPU Home Style | Zhongshan Public vs. Chahua Modern Housewares | Zhongshan Public vs. Anhui Transport Consulting |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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