Correlation Between Shenyang Chemical and China National
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By analyzing existing cross correlation between Shenyang Chemical Industry and China National Software, you can compare the effects of market volatilities on Shenyang Chemical and China National 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 China National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Chemical and China National.
Diversification Opportunities for Shenyang Chemical and China National
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenyang and China is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Chemical Industry and China National Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China National Software 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 China National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China National Software has no effect on the direction of Shenyang Chemical i.e., Shenyang Chemical and China National go up and down completely randomly.
Pair Corralation between Shenyang Chemical and China National
Assuming the 90 days trading horizon Shenyang Chemical is expected to generate 5.67 times less return on investment than China National. But when comparing it to its historical volatility, Shenyang Chemical Industry is 1.13 times less risky than China National. It trades about 0.01 of its potential returns per unit of risk. China National Software is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,835 in China National Software on September 12, 2024 and sell it today you would earn a total of 764.00 from holding China National Software or generate 15.8% 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. China National Software
Performance |
| Timeline |
| Shenyang Chemical |
| China National Software |
Shenyang Chemical and China National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenyang Chemical and China National
The main advantage of trading using opposite Shenyang Chemical and China National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Chemical position performs unexpectedly, China National 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 China National will offset losses from the drop in China National'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 |
| China National vs. Gansu Jiu Steel | China National vs. Shandong Mining Machinery | China National vs. Aba Chemicals Corp | China National vs. BlueFocus Communication 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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