Correlation Between Lianhe Chemical and Ping An
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By analyzing existing cross correlation between Lianhe Chemical Technology and Ping An Bank, you can compare the effects of market volatilities on Lianhe Chemical and Ping An 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 Lianhe Chemical with a short position of Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lianhe Chemical and Ping An.
Diversification Opportunities for Lianhe Chemical and Ping An
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lianhe and Ping is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Lianhe Chemical Technology and Ping An Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ping An Bank and Lianhe 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 Lianhe Chemical Technology are associated (or correlated) with Ping An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ping An Bank has no effect on the direction of Lianhe Chemical i.e., Lianhe Chemical and Ping An go up and down completely randomly.
Pair Corralation between Lianhe Chemical and Ping An
Assuming the 90 days trading horizon Lianhe Chemical Technology is expected to generate 1.47 times more return on investment than Ping An. However, Lianhe Chemical is 1.47 times more volatile than Ping An Bank. It trades about 0.11 of its potential returns per unit of risk. Ping An Bank is currently generating about -0.04 per unit of risk. If you would invest 574.00 in Lianhe Chemical Technology on August 30, 2024 and sell it today you would earn a total of 26.00 from holding Lianhe Chemical Technology or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lianhe Chemical Technology vs. Ping An Bank
Performance |
| Timeline |
| Lianhe Chemical Tech |
| Ping An Bank |
Lianhe Chemical and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lianhe Chemical and Ping An
The main advantage of trading using opposite Lianhe Chemical and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lianhe Chemical position performs unexpectedly, Ping An 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 Ping An will offset losses from the drop in Ping An's long position.| Lianhe Chemical vs. Shandong Gold Mining | Lianhe Chemical vs. Rongsheng Petrochemical Co | Lianhe Chemical vs. Inner Mongolia BaoTou | Lianhe Chemical vs. Jiangxi Ganfeng Lithium |
| Ping An vs. Linewell Software Co | Ping An vs. Maoming Petro Chemical Shihua | Ping An vs. Lianhe Chemical Technology | Ping An vs. Dymatic Chemicals |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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