Correlation Between Shenyang Chemical and Industrial Securities
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By analyzing existing cross correlation between Shenyang Chemical Industry and Industrial Securities Co, you can compare the effects of market volatilities on Shenyang Chemical and Industrial Securities 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 Industrial Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Chemical and Industrial Securities.
Diversification Opportunities for Shenyang Chemical and Industrial Securities
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenyang and Industrial is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Chemical Industry and Industrial Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Securities 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 Industrial Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Securities has no effect on the direction of Shenyang Chemical i.e., Shenyang Chemical and Industrial Securities go up and down completely randomly.
Pair Corralation between Shenyang Chemical and Industrial Securities
Assuming the 90 days trading horizon Shenyang Chemical Industry is expected to generate 2.43 times more return on investment than Industrial Securities. However, Shenyang Chemical is 2.43 times more volatile than Industrial Securities Co. It trades about 0.12 of its potential returns per unit of risk. Industrial Securities Co is currently generating about -0.22 per unit of risk. If you would invest 357.00 in Shenyang Chemical Industry on September 12, 2024 and sell it today you would earn a total of 28.00 from holding Shenyang Chemical Industry or generate 7.84% 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. Industrial Securities Co
Performance |
| Timeline |
| Shenyang Chemical |
| Industrial Securities |
Shenyang Chemical and Industrial Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenyang Chemical and Industrial Securities
The main advantage of trading using opposite Shenyang Chemical and Industrial Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Chemical position performs unexpectedly, Industrial Securities 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 Industrial Securities will offset losses from the drop in Industrial Securities' 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 |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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