Correlation Between Changchun and Shandong Polymer
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By analyzing existing cross correlation between Changchun UP Optotech and Shandong Polymer Biochemicals, you can compare the effects of market volatilities on Changchun 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 Changchun with a short position of Shandong Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun and Shandong Polymer.
Diversification Opportunities for Changchun and Shandong Polymer
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Changchun and Shandong is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Changchun UP Optotech 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 Changchun 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 Changchun UP Optotech 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 Changchun i.e., Changchun and Shandong Polymer go up and down completely randomly.
Pair Corralation between Changchun and Shandong Polymer
Assuming the 90 days trading horizon Changchun UP Optotech is expected to generate 1.41 times more return on investment than Shandong Polymer. However, Changchun is 1.41 times more volatile than Shandong Polymer Biochemicals. It trades about 0.1 of its potential returns per unit of risk. Shandong Polymer Biochemicals is currently generating about 0.04 per unit of risk. If you would invest 2,762 in Changchun UP Optotech on September 3, 2024 and sell it today you would earn a total of 1,393 from holding Changchun UP Optotech or generate 50.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun UP Optotech vs. Shandong Polymer Biochemicals
Performance |
| Timeline |
| Changchun UP Optotech |
| Shandong Polymer Bio |
Changchun and Shandong Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun and Shandong Polymer
The main advantage of trading using opposite Changchun and Shandong Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun 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.| Changchun vs. Focus Media Information | Changchun vs. Jiangsu Yanghe Brewery | Changchun vs. Guangdong Brandmax Marketing | Changchun vs. YLZ Information Tech |
| Shandong Polymer vs. Zijin Mining Group | Shandong Polymer vs. Baoshan Iron Steel | Shandong Polymer vs. Rongsheng Petrochemical Co | Shandong Polymer vs. Hoshine Silicon Ind |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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