Correlation Between Beijing Shunxin and Shenyang Chemical
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By analyzing existing cross correlation between Beijing Shunxin Agriculture and Shenyang Chemical Industry, you can compare the effects of market volatilities on Beijing Shunxin and Shenyang Chemical 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 Beijing Shunxin with a short position of Shenyang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Shunxin and Shenyang Chemical.
Diversification Opportunities for Beijing Shunxin and Shenyang Chemical
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Shenyang is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Shunxin Agriculture and Shenyang Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenyang Chemical and Beijing Shunxin 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 Beijing Shunxin Agriculture are associated (or correlated) with Shenyang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenyang Chemical has no effect on the direction of Beijing Shunxin i.e., Beijing Shunxin and Shenyang Chemical go up and down completely randomly.
Pair Corralation between Beijing Shunxin and Shenyang Chemical
Assuming the 90 days trading horizon Beijing Shunxin Agriculture is expected to under-perform the Shenyang Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Beijing Shunxin Agriculture is 1.17 times less risky than Shenyang Chemical. The stock trades about -0.03 of its potential returns per unit of risk. The Shenyang Chemical Industry is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 427.00 in Shenyang Chemical Industry on October 21, 2024 and sell it today you would lose (96.00) from holding Shenyang Chemical Industry or give up 22.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Shunxin Agriculture vs. Shenyang Chemical Industry
Performance |
| Timeline |
| Beijing Shunxin Agri |
| Shenyang Chemical |
Beijing Shunxin and Shenyang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Shunxin and Shenyang Chemical
The main advantage of trading using opposite Beijing Shunxin and Shenyang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Shunxin position performs unexpectedly, Shenyang Chemical 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 Shenyang Chemical will offset losses from the drop in Shenyang Chemical's long position.| Beijing Shunxin vs. Postal Savings Bank | Beijing Shunxin vs. Longxing Chemical Stock | Beijing Shunxin vs. HeBei Jinniu Chemical | Beijing Shunxin vs. Jinsanjiang Silicon Material |
| Shenyang Chemical vs. JuneYao Dairy Co | Shenyang Chemical vs. Hainan Airlines Co | Shenyang Chemical vs. China Eastern Airlines | Shenyang Chemical vs. Beijing Shunxin Agriculture |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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