Correlation Between North Chemical and Maoming Petro
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By analyzing existing cross correlation between North Chemical Industries and Maoming Petro Chemical Shihua, you can compare the effects of market volatilities on North Chemical and Maoming Petro 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 North Chemical with a short position of Maoming Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Chemical and Maoming Petro.
Diversification Opportunities for North Chemical and Maoming Petro
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between North and Maoming is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding North Chemical Industries and Maoming Petro Chemical Shihua in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maoming Petro Chemical and North 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 North Chemical Industries are associated (or correlated) with Maoming Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maoming Petro Chemical has no effect on the direction of North Chemical i.e., North Chemical and Maoming Petro go up and down completely randomly.
Pair Corralation between North Chemical and Maoming Petro
Assuming the 90 days trading horizon North Chemical Industries is expected to under-perform the Maoming Petro. In addition to that, North Chemical is 1.15 times more volatile than Maoming Petro Chemical Shihua. It trades about -0.25 of its total potential returns per unit of risk. Maoming Petro Chemical Shihua is currently generating about -0.04 per unit of volatility. If you would invest 369.00 in Maoming Petro Chemical Shihua on November 3, 2024 and sell it today you would lose (6.00) from holding Maoming Petro Chemical Shihua or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
North Chemical Industries vs. Maoming Petro Chemical Shihua
Performance |
| Timeline |
| North Chemical Industries |
| Maoming Petro Chemical |
North Chemical and Maoming Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Chemical and Maoming Petro
The main advantage of trading using opposite North Chemical and Maoming Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Chemical position performs unexpectedly, Maoming Petro 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 Maoming Petro will offset losses from the drop in Maoming Petro's long position.| North Chemical vs. Nanya New Material | North Chemical vs. Sino Medical Sciences | North Chemical vs. Qingdao Haier Biomedical | North Chemical vs. Xiangyu Medical Co |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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