Correlation Between Lianhe Chemical and Shanghai Xinhua
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By analyzing existing cross correlation between Lianhe Chemical Technology and Shanghai Xinhua Media, you can compare the effects of market volatilities on Lianhe Chemical and Shanghai Xinhua 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 Shanghai Xinhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lianhe Chemical and Shanghai Xinhua.
Diversification Opportunities for Lianhe Chemical and Shanghai Xinhua
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lianhe and Shanghai is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Lianhe Chemical Technology and Shanghai Xinhua Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Xinhua Media 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 Shanghai Xinhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Xinhua Media has no effect on the direction of Lianhe Chemical i.e., Lianhe Chemical and Shanghai Xinhua go up and down completely randomly.
Pair Corralation between Lianhe Chemical and Shanghai Xinhua
Assuming the 90 days trading horizon Lianhe Chemical Technology is expected to generate 0.52 times more return on investment than Shanghai Xinhua. However, Lianhe Chemical Technology is 1.94 times less risky than Shanghai Xinhua. It trades about 0.08 of its potential returns per unit of risk. Shanghai Xinhua Media is currently generating about 0.0 per unit of risk. If you would invest 589.00 in Lianhe Chemical Technology on September 2, 2024 and sell it today you would earn a total of 17.00 from holding Lianhe Chemical Technology or generate 2.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lianhe Chemical Technology vs. Shanghai Xinhua Media
Performance |
| Timeline |
| Lianhe Chemical Tech |
| Shanghai Xinhua Media |
Lianhe Chemical and Shanghai Xinhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lianhe Chemical and Shanghai Xinhua
The main advantage of trading using opposite Lianhe Chemical and Shanghai Xinhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lianhe Chemical position performs unexpectedly, Shanghai Xinhua 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 Shanghai Xinhua will offset losses from the drop in Shanghai Xinhua's long position.| Lianhe Chemical vs. Zijin Mining Group | Lianhe Chemical vs. Baoshan Iron Steel | Lianhe Chemical vs. Shandong Gold Mining | Lianhe Chemical vs. Rongsheng Petrochemical Co |
| Shanghai Xinhua vs. China Everbright Bank | Shanghai Xinhua vs. Lianhe Chemical Technology | Shanghai Xinhua vs. Xilong Chemical Co | Shanghai Xinhua vs. Nancal Energy Saving Tech |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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