Correlation Between North Chemical and Shandong Polymer
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By analyzing existing cross correlation between North Chemical Industries and Shandong Polymer Biochemicals, you can compare the effects of market volatilities on North Chemical 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 North Chemical with a short position of Shandong Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Chemical and Shandong Polymer.
Diversification Opportunities for North Chemical and Shandong Polymer
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between North and Shandong is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding North Chemical Industries 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 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 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 North Chemical i.e., North Chemical and Shandong Polymer go up and down completely randomly.
Pair Corralation between North Chemical and Shandong Polymer
Assuming the 90 days trading horizon North Chemical Industries is expected to generate 1.2 times more return on investment than Shandong Polymer. However, North Chemical is 1.2 times more volatile than Shandong Polymer Biochemicals. It trades about 0.06 of its potential returns per unit of risk. Shandong Polymer Biochemicals is currently generating about -0.01 per unit of risk. If you would invest 821.00 in North Chemical Industries on September 4, 2024 and sell it today you would earn a total of 407.00 from holding North Chemical Industries or generate 49.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
North Chemical Industries vs. Shandong Polymer Biochemicals
Performance |
| Timeline |
| North Chemical Industries |
| Shandong Polymer Bio |
North Chemical and Shandong Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Chemical and Shandong Polymer
The main advantage of trading using opposite North Chemical and Shandong Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Chemical 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.| North Chemical vs. Tibet Huayu Mining | North Chemical vs. Uroica Mining Safety | North Chemical vs. China Sports Industry | North Chemical vs. Luyin Investment Group |
| Shandong Polymer vs. Zijin Mining Group | Shandong Polymer vs. Wanhua Chemical Group | Shandong Polymer vs. Baoshan Iron Steel | Shandong Polymer 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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