Correlation Between Shandong Polymer and Nanhua Bio
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By analyzing existing cross correlation between Shandong Polymer Biochemicals and Nanhua Bio Medicine, you can compare the effects of market volatilities on Shandong Polymer and Nanhua Bio 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 Nanhua Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Polymer and Nanhua Bio.
Diversification Opportunities for Shandong Polymer and Nanhua Bio
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Nanhua is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Polymer Biochemicals and Nanhua Bio Medicine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanhua Bio Medicine 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 Nanhua Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanhua Bio Medicine has no effect on the direction of Shandong Polymer i.e., Shandong Polymer and Nanhua Bio go up and down completely randomly.
Pair Corralation between Shandong Polymer and Nanhua Bio
Assuming the 90 days trading horizon Shandong Polymer is expected to generate 2.13 times less return on investment than Nanhua Bio. But when comparing it to its historical volatility, Shandong Polymer Biochemicals is 1.64 times less risky than Nanhua Bio. It trades about 0.08 of its potential returns per unit of risk. Nanhua Bio Medicine is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 835.00 in Nanhua Bio Medicine on November 1, 2024 and sell it today you would earn a total of 50.00 from holding Nanhua Bio Medicine or generate 5.99% 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. Nanhua Bio Medicine
Performance |
| Timeline |
| Shandong Polymer Bio |
| Nanhua Bio Medicine |
Shandong Polymer and Nanhua Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Polymer and Nanhua Bio
The main advantage of trading using opposite Shandong Polymer and Nanhua Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Polymer position performs unexpectedly, Nanhua Bio 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 Nanhua Bio will offset losses from the drop in Nanhua Bio's long position.| Shandong Polymer vs. SI TECH Information Technology | Shandong Polymer vs. Jiangyin Jianghua Microelectronics | Shandong Polymer vs. Wonders Information | Shandong Polymer vs. Hangzhou Gisway Information |
| Nanhua Bio vs. Senci Electric Machinery | Nanhua Bio vs. Shanghai Yanpu Metal | Nanhua Bio vs. JCHX Mining Management | Nanhua Bio vs. Guangzhou KDT Machinery |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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