Correlation Between Shandong Polymer and China Reform
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By analyzing existing cross correlation between Shandong Polymer Biochemicals and China Reform Health, you can compare the effects of market volatilities on Shandong Polymer and China Reform 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 Polymer with a short position of China Reform. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Polymer and China Reform.
Diversification Opportunities for Shandong Polymer and China Reform
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and China is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Polymer Biochemicals and China Reform Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Reform Health and Shandong Polymer 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 Polymer Biochemicals are associated (or correlated) with China Reform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Reform Health has no effect on the direction of Shandong Polymer i.e., Shandong Polymer and China Reform go up and down completely randomly.
Pair Corralation between Shandong Polymer and China Reform
Assuming the 90 days trading horizon Shandong Polymer Biochemicals is expected to generate 0.47 times more return on investment than China Reform. However, Shandong Polymer Biochemicals is 2.14 times less risky than China Reform. It trades about 0.06 of its potential returns per unit of risk. China Reform Health is currently generating about -0.03 per unit of risk. If you would invest 474.00 in Shandong Polymer Biochemicals on September 15, 2024 and sell it today you would earn a total of 11.00 from holding Shandong Polymer Biochemicals or generate 2.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Polymer Biochemicals vs. China Reform Health
Performance |
| Timeline |
| Shandong Polymer Bio |
| China Reform Health |
Shandong Polymer and China Reform Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Polymer and China Reform
The main advantage of trading using opposite Shandong Polymer and China Reform positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Polymer position performs unexpectedly, China Reform 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 China Reform will offset losses from the drop in China Reform's long position.| Shandong Polymer vs. Anhui Deli Household | Shandong Polymer vs. Jahen Household Products | Shandong Polymer vs. Fujian Rongji Software | Shandong Polymer vs. Lianhe Chemical Technology |
| China Reform vs. Jiangsu Jinling Sports | China Reform vs. V V Food | China Reform vs. Anji Foodstuff Co | China Reform vs. Shandong Polymer Biochemicals |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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