Correlation Between Shenyang Chemical and Shandong Rike
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By analyzing existing cross correlation between Shenyang Chemical Industry and Shandong Rike Chemical, you can compare the effects of market volatilities on Shenyang Chemical and Shandong Rike 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 Shandong Rike. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Chemical and Shandong Rike.
Diversification Opportunities for Shenyang Chemical and Shandong Rike
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenyang and Shandong is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Chemical Industry and Shandong Rike Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Rike Chemical 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 Shandong Rike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Rike Chemical has no effect on the direction of Shenyang Chemical i.e., Shenyang Chemical and Shandong Rike go up and down completely randomly.
Pair Corralation between Shenyang Chemical and Shandong Rike
Assuming the 90 days trading horizon Shenyang Chemical Industry is expected to under-perform the Shandong Rike. In addition to that, Shenyang Chemical is 1.02 times more volatile than Shandong Rike Chemical. It trades about -0.02 of its total potential returns per unit of risk. Shandong Rike Chemical is currently generating about 0.0 per unit of volatility. If you would invest 696.00 in Shandong Rike Chemical on November 2, 2024 and sell it today you would lose (133.00) from holding Shandong Rike Chemical or give up 19.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenyang Chemical Industry vs. Shandong Rike Chemical
Performance |
| Timeline |
| Shenyang Chemical |
| Shandong Rike Chemical |
Shenyang Chemical and Shandong Rike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenyang Chemical and Shandong Rike
The main advantage of trading using opposite Shenyang Chemical and Shandong Rike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Chemical position performs unexpectedly, Shandong Rike 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 Shandong Rike will offset losses from the drop in Shandong Rike's long position.| Shenyang Chemical vs. Fibocom Wireless | Shenyang Chemical vs. Runjian Communication Co | Shenyang Chemical vs. Guangdong Jinma Entertainment | Shenyang Chemical vs. Fiberhome Telecommunication Technologies |
| Shandong Rike vs. Zhengping RoadBridge Constr | Shandong Rike vs. Chengdu Xinzhu RoadBridge | Shandong Rike vs. Chengtun Mining Group | Shandong Rike vs. Zhengzhou Coal 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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