Correlation Between Dongrui Food and Shandong Polymer
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By analyzing existing cross correlation between Dongrui Food Group and Shandong Polymer Biochemicals, you can compare the effects of market volatilities on Dongrui Food and Shandong Polymer 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 Dongrui Food with a short position of Shandong Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongrui Food and Shandong Polymer.
Diversification Opportunities for Dongrui Food and Shandong Polymer
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongrui and Shandong is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dongrui Food Group and Shandong Polymer Biochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Polymer Bio and Dongrui Food 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 Dongrui Food Group are associated (or correlated) with Shandong Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Polymer Bio has no effect on the direction of Dongrui Food i.e., Dongrui Food and Shandong Polymer go up and down completely randomly.
Pair Corralation between Dongrui Food and Shandong Polymer
Assuming the 90 days trading horizon Dongrui Food Group is expected to generate 0.76 times more return on investment than Shandong Polymer. However, Dongrui Food Group is 1.31 times less risky than Shandong Polymer. It trades about -0.21 of its potential returns per unit of risk. Shandong Polymer Biochemicals is currently generating about -0.38 per unit of risk. If you would invest 1,623 in Dongrui Food Group on October 9, 2024 and sell it today you would lose (141.00) from holding Dongrui Food Group or give up 8.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongrui Food Group vs. Shandong Polymer Biochemicals
Performance |
| Timeline |
| Dongrui Food Group |
| Shandong Polymer Bio |
Dongrui Food and Shandong Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongrui Food and Shandong Polymer
The main advantage of trading using opposite Dongrui Food and Shandong Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongrui Food position performs unexpectedly, Shandong Polymer 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 Shandong Polymer will offset losses from the drop in Shandong Polymer's long position.| Dongrui Food vs. Qijing Machinery | Dongrui Food vs. Weichai Heavy Machinery | Dongrui Food vs. Guangzhou Automobile Group | Dongrui Food vs. Tengda Construction Group |
| Shandong Polymer vs. Qumei Furniture Group | Shandong Polymer vs. Luolai Home Textile | Shandong Polymer vs. Suofeiya Home Collection | Shandong Polymer vs. Duzhe Publishing Media |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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