Correlation Between Shenyang Chemical and Jiangxi Naipu
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By analyzing existing cross correlation between Shenyang Chemical Industry and Jiangxi Naipu Mining, you can compare the effects of market volatilities on Shenyang Chemical and Jiangxi Naipu 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 Jiangxi Naipu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Chemical and Jiangxi Naipu.
Diversification Opportunities for Shenyang Chemical and Jiangxi Naipu
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenyang and Jiangxi is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Chemical Industry and Jiangxi Naipu Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Naipu Mining 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 Jiangxi Naipu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Naipu Mining has no effect on the direction of Shenyang Chemical i.e., Shenyang Chemical and Jiangxi Naipu go up and down completely randomly.
Pair Corralation between Shenyang Chemical and Jiangxi Naipu
Assuming the 90 days trading horizon Shenyang Chemical is expected to generate 10.57 times less return on investment than Jiangxi Naipu. But when comparing it to its historical volatility, Shenyang Chemical Industry is 1.03 times less risky than Jiangxi Naipu. It trades about 0.01 of its potential returns per unit of risk. Jiangxi Naipu Mining is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,884 in Jiangxi Naipu Mining on September 12, 2024 and sell it today you would earn a total of 1,081 from holding Jiangxi Naipu Mining or generate 57.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenyang Chemical Industry vs. Jiangxi Naipu Mining
Performance |
| Timeline |
| Shenyang Chemical |
| Jiangxi Naipu Mining |
Shenyang Chemical and Jiangxi Naipu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenyang Chemical and Jiangxi Naipu
The main advantage of trading using opposite Shenyang Chemical and Jiangxi Naipu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Chemical position performs unexpectedly, Jiangxi Naipu 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 Jiangxi Naipu will offset losses from the drop in Jiangxi Naipu's long position.| Shenyang Chemical vs. Zijin Mining Group | Shenyang Chemical vs. Wanhua Chemical Group | Shenyang Chemical vs. Baoshan Iron Steel | Shenyang Chemical vs. Rongsheng Petrochemical Co |
| Jiangxi Naipu vs. Agricultural Bank of | Jiangxi Naipu vs. Industrial and Commercial | Jiangxi Naipu vs. Bank of China | Jiangxi Naipu vs. PetroChina Co Ltd |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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