Correlation Between Shenyang Chemical and Sichuan Hebang
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By analyzing existing cross correlation between Shenyang Chemical Industry and Sichuan Hebang Biotechnology, you can compare the effects of market volatilities on Shenyang Chemical and Sichuan Hebang 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 Sichuan Hebang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Chemical and Sichuan Hebang.
Diversification Opportunities for Shenyang Chemical and Sichuan Hebang
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenyang and Sichuan is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Chemical Industry and Sichuan Hebang Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Hebang Biote 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 Sichuan Hebang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Hebang Biote has no effect on the direction of Shenyang Chemical i.e., Shenyang Chemical and Sichuan Hebang go up and down completely randomly.
Pair Corralation between Shenyang Chemical and Sichuan Hebang
Assuming the 90 days trading horizon Shenyang Chemical Industry is expected to generate 1.51 times more return on investment than Sichuan Hebang. However, Shenyang Chemical is 1.51 times more volatile than Sichuan Hebang Biotechnology. It trades about -0.02 of its potential returns per unit of risk. Sichuan Hebang Biotechnology is currently generating about -0.05 per unit of risk. If you would invest 505.00 in Shenyang Chemical Industry on October 16, 2024 and sell it today you would lose (188.00) from holding Shenyang Chemical Industry or give up 37.23% 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. Sichuan Hebang Biotechnology
Performance |
| Timeline |
| Shenyang Chemical |
| Sichuan Hebang Biote |
Shenyang Chemical and Sichuan Hebang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenyang Chemical and Sichuan Hebang
The main advantage of trading using opposite Shenyang Chemical and Sichuan Hebang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Chemical position performs unexpectedly, Sichuan Hebang 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 Sichuan Hebang will offset losses from the drop in Sichuan Hebang's long position.| Shenyang Chemical vs. Zoje Resources Investment | Shenyang Chemical vs. Harbin Hatou Investment | Shenyang Chemical vs. Chengtun Mining Group | Shenyang Chemical vs. Zijin Mining Group |
| Sichuan Hebang vs. China Eastern Airlines | Sichuan Hebang vs. Allwin Telecommunication Co | Sichuan Hebang vs. Runjian Communication Co | Sichuan Hebang vs. Beijing Bewinner Communications |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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