Correlation Between Shandong Polymer and Changchun High
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By analyzing existing cross correlation between Shandong Polymer Biochemicals and Changchun High New, you can compare the effects of market volatilities on Shandong Polymer and Changchun High 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 Changchun High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Polymer and Changchun High.
Diversification Opportunities for Shandong Polymer and Changchun High
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Changchun is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Polymer Biochemicals and Changchun High New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun High New 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 Changchun High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun High New has no effect on the direction of Shandong Polymer i.e., Shandong Polymer and Changchun High go up and down completely randomly.
Pair Corralation between Shandong Polymer and Changchun High
Assuming the 90 days trading horizon Shandong Polymer Biochemicals is expected to generate 1.2 times more return on investment than Changchun High. However, Shandong Polymer is 1.2 times more volatile than Changchun High New. It trades about 0.0 of its potential returns per unit of risk. Changchun High New is currently generating about -0.03 per unit of risk. If you would invest 553.00 in Shandong Polymer Biochemicals on September 3, 2024 and sell it today you would lose (89.00) from holding Shandong Polymer Biochemicals or give up 16.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Polymer Biochemicals vs. Changchun High New
Performance |
| Timeline |
| Shandong Polymer Bio |
| Changchun High New |
Shandong Polymer and Changchun High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Polymer and Changchun High
The main advantage of trading using opposite Shandong Polymer and Changchun High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Polymer position performs unexpectedly, Changchun High 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 Changchun High will offset losses from the drop in Changchun High'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 |
| Changchun High vs. Guangzhou Restaurants Group | Changchun High vs. Suzhou Douson Drilling | Changchun High vs. Beijing Sanyuan Foods | Changchun High vs. Kingsignal Technology Co |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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