Correlation Between Shenyang Chemical and Guangzhou Ruoyuchen
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By analyzing existing cross correlation between Shenyang Chemical Industry and Guangzhou Ruoyuchen Information, you can compare the effects of market volatilities on Shenyang Chemical and Guangzhou Ruoyuchen 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 Guangzhou Ruoyuchen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Chemical and Guangzhou Ruoyuchen.
Diversification Opportunities for Shenyang Chemical and Guangzhou Ruoyuchen
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shenyang and Guangzhou is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Chemical Industry and Guangzhou Ruoyuchen Informatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Ruoyuchen 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 Guangzhou Ruoyuchen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Ruoyuchen has no effect on the direction of Shenyang Chemical i.e., Shenyang Chemical and Guangzhou Ruoyuchen go up and down completely randomly.
Pair Corralation between Shenyang Chemical and Guangzhou Ruoyuchen
Assuming the 90 days trading horizon Shenyang Chemical is expected to generate 7.96 times less return on investment than Guangzhou Ruoyuchen. But when comparing it to its historical volatility, Shenyang Chemical Industry is 1.32 times less risky than Guangzhou Ruoyuchen. It trades about 0.03 of its potential returns per unit of risk. Guangzhou Ruoyuchen Information is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,112 in Guangzhou Ruoyuchen Information on October 26, 2024 and sell it today you would earn a total of 1,529 from holding Guangzhou Ruoyuchen Information or generate 137.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenyang Chemical Industry vs. Guangzhou Ruoyuchen Informatio
Performance |
| Timeline |
| Shenyang Chemical |
| Guangzhou Ruoyuchen |
Shenyang Chemical and Guangzhou Ruoyuchen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenyang Chemical and Guangzhou Ruoyuchen
The main advantage of trading using opposite Shenyang Chemical and Guangzhou Ruoyuchen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Chemical position performs unexpectedly, Guangzhou Ruoyuchen 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 Guangzhou Ruoyuchen will offset losses from the drop in Guangzhou Ruoyuchen's long position.| Shenyang Chemical vs. Zijin Mining Group | Shenyang Chemical vs. Wanhua Chemical Group | Shenyang Chemical vs. Baoshan Iron Steel | Shenyang Chemical vs. Shandong Gold Mining |
| Guangzhou Ruoyuchen vs. China Petroleum Chemical | Guangzhou Ruoyuchen vs. PetroChina Co Ltd | Guangzhou Ruoyuchen vs. China State Construction | Guangzhou Ruoyuchen vs. China Railway Group |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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