Correlation Between Shenzhen Noposion and Liuzhou Chemical
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By analyzing existing cross correlation between Shenzhen Noposion Agrochemicals and Liuzhou Chemical Industry, you can compare the effects of market volatilities on Shenzhen Noposion and Liuzhou 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 Shenzhen Noposion with a short position of Liuzhou Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Noposion and Liuzhou Chemical.
Diversification Opportunities for Shenzhen Noposion and Liuzhou Chemical
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shenzhen and Liuzhou is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Noposion Agrochemical and Liuzhou Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liuzhou Chemical Industry and Shenzhen Noposion 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 Shenzhen Noposion Agrochemicals are associated (or correlated) with Liuzhou Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liuzhou Chemical Industry has no effect on the direction of Shenzhen Noposion i.e., Shenzhen Noposion and Liuzhou Chemical go up and down completely randomly.
Pair Corralation between Shenzhen Noposion and Liuzhou Chemical
Assuming the 90 days trading horizon Shenzhen Noposion is expected to generate 1.08 times less return on investment than Liuzhou Chemical. But when comparing it to its historical volatility, Shenzhen Noposion Agrochemicals is 1.11 times less risky than Liuzhou Chemical. It trades about 0.18 of its potential returns per unit of risk. Liuzhou Chemical Industry is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 229.00 in Liuzhou Chemical Industry on August 29, 2024 and sell it today you would earn a total of 73.00 from holding Liuzhou Chemical Industry or generate 31.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Noposion Agrochemical vs. Liuzhou Chemical Industry
Performance |
| Timeline |
| Shenzhen Noposion |
| Liuzhou Chemical Industry |
Shenzhen Noposion and Liuzhou Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Noposion and Liuzhou Chemical
The main advantage of trading using opposite Shenzhen Noposion and Liuzhou Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Noposion position performs unexpectedly, Liuzhou 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 Liuzhou Chemical will offset losses from the drop in Liuzhou Chemical's long position.| Shenzhen Noposion vs. Wanhua Chemical Group | Shenzhen Noposion vs. Baoshan Iron Steel | Shenzhen Noposion vs. Shandong Gold Mining | Shenzhen Noposion vs. Rongsheng Petrochemical Co |
| Liuzhou Chemical vs. Wanhua Chemical Group | Liuzhou Chemical vs. Baoshan Iron Steel | Liuzhou Chemical vs. Shandong Gold Mining | Liuzhou Chemical vs. Rongsheng Petrochemical Co |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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