Correlation Between Shandong Hongchuang and Dymatic Chemicals
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By analyzing existing cross correlation between Shandong Hongchuang Aluminum and Dymatic Chemicals, you can compare the effects of market volatilities on Shandong Hongchuang and Dymatic Chemicals 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 Shandong Hongchuang with a short position of Dymatic Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Hongchuang and Dymatic Chemicals.
Diversification Opportunities for Shandong Hongchuang and Dymatic Chemicals
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Dymatic is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Hongchuang Aluminum and Dymatic Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dymatic Chemicals and Shandong Hongchuang 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 Shandong Hongchuang Aluminum are associated (or correlated) with Dymatic Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dymatic Chemicals has no effect on the direction of Shandong Hongchuang i.e., Shandong Hongchuang and Dymatic Chemicals go up and down completely randomly.
Pair Corralation between Shandong Hongchuang and Dymatic Chemicals
Assuming the 90 days trading horizon Shandong Hongchuang Aluminum is expected to generate 0.94 times more return on investment than Dymatic Chemicals. However, Shandong Hongchuang Aluminum is 1.07 times less risky than Dymatic Chemicals. It trades about 0.09 of its potential returns per unit of risk. Dymatic Chemicals is currently generating about 0.01 per unit of risk. If you would invest 467.00 in Shandong Hongchuang Aluminum on September 14, 2024 and sell it today you would earn a total of 319.00 from holding Shandong Hongchuang Aluminum or generate 68.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.62% |
| Values | Daily Returns |
Shandong Hongchuang Aluminum vs. Dymatic Chemicals
Performance |
| Timeline |
| Shandong Hongchuang |
| Dymatic Chemicals |
Shandong Hongchuang and Dymatic Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Hongchuang and Dymatic Chemicals
The main advantage of trading using opposite Shandong Hongchuang and Dymatic Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Hongchuang position performs unexpectedly, Dymatic Chemicals 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 Dymatic Chemicals will offset losses from the drop in Dymatic Chemicals' long position.| Shandong Hongchuang vs. Zijin Mining Group | Shandong Hongchuang vs. Wanhua Chemical Group | Shandong Hongchuang vs. Baoshan Iron Steel | Shandong Hongchuang 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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