Correlation Between Shenyang Chemical and ROPEOK Technology
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By analyzing existing cross correlation between Shenyang Chemical Industry and ROPEOK Technology Group, you can compare the effects of market volatilities on Shenyang Chemical and ROPEOK Technology 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 ROPEOK Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Chemical and ROPEOK Technology.
Diversification Opportunities for Shenyang Chemical and ROPEOK Technology
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenyang and ROPEOK is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Chemical Industry and ROPEOK Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROPEOK Technology 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 ROPEOK Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROPEOK Technology has no effect on the direction of Shenyang Chemical i.e., Shenyang Chemical and ROPEOK Technology go up and down completely randomly.
Pair Corralation between Shenyang Chemical and ROPEOK Technology
Assuming the 90 days trading horizon Shenyang Chemical Industry is expected to generate 1.06 times more return on investment than ROPEOK Technology. However, Shenyang Chemical is 1.06 times more volatile than ROPEOK Technology Group. It trades about 0.03 of its potential returns per unit of risk. ROPEOK Technology Group is currently generating about 0.02 per unit of risk. If you would invest 304.00 in Shenyang Chemical Industry on October 15, 2024 and sell it today you would earn a total of 9.00 from holding Shenyang Chemical Industry or generate 2.96% 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. ROPEOK Technology Group
Performance |
| Timeline |
| Shenyang Chemical |
| ROPEOK Technology |
Shenyang Chemical and ROPEOK Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenyang Chemical and ROPEOK Technology
The main advantage of trading using opposite Shenyang Chemical and ROPEOK Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Chemical position performs unexpectedly, ROPEOK Technology 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 ROPEOK Technology will offset losses from the drop in ROPEOK Technology's long position.| Shenyang Chemical vs. Luyin Investment Group | Shenyang Chemical vs. Chengdu Xingrong Investment | Shenyang Chemical vs. Nuode Investment Co | Shenyang Chemical vs. Western Metal Materials |
| ROPEOK Technology vs. Jiangsu Financial Leasing | ROPEOK Technology vs. Qingdao Foods Co | ROPEOK Technology vs. Industrial Bank Co | ROPEOK Technology vs. Sichuan Teway Food |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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