Correlation Between Gansu Huangtai and Rongsheng Petrochemical
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By analyzing existing cross correlation between Gansu Huangtai Wine marketing and Rongsheng Petrochemical Co, you can compare the effects of market volatilities on Gansu Huangtai and Rongsheng Petrochemical 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 Gansu Huangtai with a short position of Rongsheng Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Huangtai and Rongsheng Petrochemical.
Diversification Opportunities for Gansu Huangtai and Rongsheng Petrochemical
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gansu and Rongsheng is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Huangtai Wine marketing and Rongsheng Petrochemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rongsheng Petrochemical and Gansu Huangtai 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 Gansu Huangtai Wine marketing are associated (or correlated) with Rongsheng Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rongsheng Petrochemical has no effect on the direction of Gansu Huangtai i.e., Gansu Huangtai and Rongsheng Petrochemical go up and down completely randomly.
Pair Corralation between Gansu Huangtai and Rongsheng Petrochemical
Assuming the 90 days trading horizon Gansu Huangtai Wine marketing is expected to under-perform the Rongsheng Petrochemical. In addition to that, Gansu Huangtai is 3.64 times more volatile than Rongsheng Petrochemical Co. It trades about -0.02 of its total potential returns per unit of risk. Rongsheng Petrochemical Co is currently generating about -0.08 per unit of volatility. If you would invest 907.00 in Rongsheng Petrochemical Co on October 23, 2024 and sell it today you would lose (22.00) from holding Rongsheng Petrochemical Co or give up 2.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Gansu Huangtai Wine marketing vs. Rongsheng Petrochemical Co
Performance |
| Timeline |
| Gansu Huangtai Wine |
| Rongsheng Petrochemical |
Gansu Huangtai and Rongsheng Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Huangtai and Rongsheng Petrochemical
The main advantage of trading using opposite Gansu Huangtai and Rongsheng Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Huangtai position performs unexpectedly, Rongsheng Petrochemical 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 Rongsheng Petrochemical will offset losses from the drop in Rongsheng Petrochemical's long position.| Gansu Huangtai vs. Shenyang Blue Silver | Gansu Huangtai vs. Pengxin International Mining | Gansu Huangtai vs. Konfoong Materials International | Gansu Huangtai vs. Shenzhen Silver Basis |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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