Correlation Between Shandong Polymer and Chengdu Xingrong
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By analyzing existing cross correlation between Shandong Polymer Biochemicals and Chengdu Xingrong Investment, you can compare the effects of market volatilities on Shandong Polymer and Chengdu Xingrong 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 Chengdu Xingrong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Polymer and Chengdu Xingrong.
Diversification Opportunities for Shandong Polymer and Chengdu Xingrong
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shandong and Chengdu is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Polymer Biochemicals and Chengdu Xingrong Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Xingrong Inv 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 Chengdu Xingrong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Xingrong Inv has no effect on the direction of Shandong Polymer i.e., Shandong Polymer and Chengdu Xingrong go up and down completely randomly.
Pair Corralation between Shandong Polymer and Chengdu Xingrong
Assuming the 90 days trading horizon Shandong Polymer Biochemicals is expected to under-perform the Chengdu Xingrong. In addition to that, Shandong Polymer is 1.52 times more volatile than Chengdu Xingrong Investment. It trades about -0.02 of its total potential returns per unit of risk. Chengdu Xingrong Investment is currently generating about 0.06 per unit of volatility. If you would invest 539.00 in Chengdu Xingrong Investment on September 3, 2024 and sell it today you would earn a total of 166.00 from holding Chengdu Xingrong Investment or generate 30.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Polymer Biochemicals vs. Chengdu Xingrong Investment
Performance |
| Timeline |
| Shandong Polymer Bio |
| Chengdu Xingrong Inv |
Shandong Polymer and Chengdu Xingrong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Polymer and Chengdu Xingrong
The main advantage of trading using opposite Shandong Polymer and Chengdu Xingrong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Polymer position performs unexpectedly, Chengdu Xingrong 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 Chengdu Xingrong will offset losses from the drop in Chengdu Xingrong's long position.| Shandong Polymer vs. Zijin Mining Group | Shandong Polymer vs. Baoshan Iron Steel | Shandong Polymer vs. Rongsheng Petrochemical Co | Shandong Polymer vs. Hoshine Silicon Ind |
| Chengdu Xingrong vs. Shandong Polymer Biochemicals | Chengdu Xingrong vs. Time Publishing and | Chengdu Xingrong vs. Dymatic Chemicals | Chengdu Xingrong vs. Shandong Publishing Media |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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