Correlation Between Shenyang Chemical and Qingdao Hi-Tech
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By analyzing existing cross correlation between Shenyang Chemical Industry and Qingdao Hi Tech Moulds, you can compare the effects of market volatilities on Shenyang Chemical and Qingdao Hi-Tech 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 Qingdao Hi-Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Chemical and Qingdao Hi-Tech.
Diversification Opportunities for Shenyang Chemical and Qingdao Hi-Tech
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenyang and Qingdao is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Chemical Industry and Qingdao Hi Tech Moulds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao Hi Tech 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 Qingdao Hi-Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao Hi Tech has no effect on the direction of Shenyang Chemical i.e., Shenyang Chemical and Qingdao Hi-Tech go up and down completely randomly.
Pair Corralation between Shenyang Chemical and Qingdao Hi-Tech
Assuming the 90 days trading horizon Shenyang Chemical Industry is expected to under-perform the Qingdao Hi-Tech. But the stock apears to be less risky and, when comparing its historical volatility, Shenyang Chemical Industry is 1.19 times less risky than Qingdao Hi-Tech. The stock trades about -0.05 of its potential returns per unit of risk. The Qingdao Hi Tech Moulds is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,979 in Qingdao Hi Tech Moulds on November 3, 2024 and sell it today you would earn a total of 104.00 from holding Qingdao Hi Tech Moulds or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenyang Chemical Industry vs. Qingdao Hi Tech Moulds
Performance |
| Timeline |
| Shenyang Chemical |
| Qingdao Hi Tech |
Shenyang Chemical and Qingdao Hi-Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenyang Chemical and Qingdao Hi-Tech
The main advantage of trading using opposite Shenyang Chemical and Qingdao Hi-Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Chemical position performs unexpectedly, Qingdao Hi-Tech 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 Qingdao Hi-Tech will offset losses from the drop in Qingdao Hi-Tech's long position.| Shenyang Chemical vs. Yunnan Jianzhijia Health Chain | Shenyang Chemical vs. Everjoy Health Group | Shenyang Chemical vs. Meinian Onehealth Healthcare | Shenyang Chemical vs. Youngy Health Co |
| Qingdao Hi-Tech vs. Lander Sports Development | Qingdao Hi-Tech vs. Sihui Fuji Electronics | Qingdao Hi-Tech vs. Fujian Longzhou Transportation | Qingdao Hi-Tech vs. Heilongjiang Transport Development |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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