Correlation Between Shenyang Chemical and DO Home
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By analyzing existing cross correlation between Shenyang Chemical Industry and DO Home Collection, you can compare the effects of market volatilities on Shenyang Chemical and DO Home 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 Shenyang Chemical with a short position of DO Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Chemical and DO Home.
Diversification Opportunities for Shenyang Chemical and DO Home
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenyang and 002798 is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Chemical Industry and DO Home Collection in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DO Home Collection and Shenyang Chemical 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 Shenyang Chemical Industry are associated (or correlated) with DO Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DO Home Collection has no effect on the direction of Shenyang Chemical i.e., Shenyang Chemical and DO Home go up and down completely randomly.
Pair Corralation between Shenyang Chemical and DO Home
Assuming the 90 days trading horizon Shenyang Chemical Industry is expected to generate 0.74 times more return on investment than DO Home. However, Shenyang Chemical Industry is 1.36 times less risky than DO Home. It trades about -0.18 of its potential returns per unit of risk. DO Home Collection is currently generating about -0.21 per unit of risk. If you would invest 388.00 in Shenyang Chemical Industry on October 17, 2024 and sell it today you would lose (60.00) from holding Shenyang Chemical Industry or give up 15.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenyang Chemical Industry vs. DO Home Collection
Performance |
| Timeline |
| Shenyang Chemical |
| DO Home Collection |
Shenyang Chemical and DO Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenyang Chemical and DO Home
The main advantage of trading using opposite Shenyang Chemical and DO Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Chemical position performs unexpectedly, DO Home 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 DO Home will offset losses from the drop in DO Home's long position.| Shenyang Chemical vs. Tongyu Communication | Shenyang Chemical vs. State Grid InformationCommunication | Shenyang Chemical vs. Qingdao Foods Co | Shenyang Chemical vs. Dongfeng Automobile Co |
| DO Home vs. Tangel Publishing | DO Home vs. FSPG Hi Tech Co | DO Home vs. Fiberhome Telecommunication Technologies | DO Home vs. Zhongshan Public Utilities |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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