Correlation Between Sichuan Fulin and Hengli Petrochemical
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By analyzing existing cross correlation between Sichuan Fulin Transportation and Hengli Petrochemical Co, you can compare the effects of market volatilities on Sichuan Fulin and Hengli Petrochemical 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 Sichuan Fulin with a short position of Hengli Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Fulin and Hengli Petrochemical.
Diversification Opportunities for Sichuan Fulin and Hengli Petrochemical
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sichuan and Hengli is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Fulin Transportation and Hengli Petrochemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Petrochemical and Sichuan Fulin 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 Sichuan Fulin Transportation are associated (or correlated) with Hengli Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengli Petrochemical has no effect on the direction of Sichuan Fulin i.e., Sichuan Fulin and Hengli Petrochemical go up and down completely randomly.
Pair Corralation between Sichuan Fulin and Hengli Petrochemical
Assuming the 90 days trading horizon Sichuan Fulin Transportation is expected to generate 1.54 times more return on investment than Hengli Petrochemical. However, Sichuan Fulin is 1.54 times more volatile than Hengli Petrochemical Co. It trades about 0.02 of its potential returns per unit of risk. Hengli Petrochemical Co is currently generating about -0.01 per unit of risk. If you would invest 655.00 in Sichuan Fulin Transportation on October 15, 2024 and sell it today you would earn a total of 34.00 from holding Sichuan Fulin Transportation or generate 5.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Fulin Transportation vs. Hengli Petrochemical Co
Performance |
| Timeline |
| Sichuan Fulin Transp |
| Hengli Petrochemical |
Sichuan Fulin and Hengli Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Fulin and Hengli Petrochemical
The main advantage of trading using opposite Sichuan Fulin and Hengli Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Fulin position performs unexpectedly, Hengli Petrochemical 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 Hengli Petrochemical will offset losses from the drop in Hengli Petrochemical's long position.| Sichuan Fulin vs. Harvest Fund Management | Sichuan Fulin vs. Jiahe Foods Industry | Sichuan Fulin vs. Shanghai Ziyan Foods | Sichuan Fulin vs. Jahen Household Products |
| Hengli Petrochemical vs. Zijin Mining Group | Hengli Petrochemical vs. Wanhua Chemical Group | Hengli Petrochemical vs. Baoshan Iron Steel | Hengli Petrochemical vs. Shandong Gold Mining |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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