Correlation Between Shandong Polymer and Changzhou Evergreen
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By analyzing existing cross correlation between Shandong Polymer Biochemicals and Changzhou Evergreen Technology, you can compare the effects of market volatilities on Shandong Polymer and Changzhou Evergreen 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 Changzhou Evergreen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Polymer and Changzhou Evergreen.
Diversification Opportunities for Shandong Polymer and Changzhou Evergreen
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Changzhou is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Polymer Biochemicals and Changzhou Evergreen Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changzhou Evergreen 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 Changzhou Evergreen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changzhou Evergreen has no effect on the direction of Shandong Polymer i.e., Shandong Polymer and Changzhou Evergreen go up and down completely randomly.
Pair Corralation between Shandong Polymer and Changzhou Evergreen
Assuming the 90 days trading horizon Shandong Polymer is expected to generate 7.33 times less return on investment than Changzhou Evergreen. But when comparing it to its historical volatility, Shandong Polymer Biochemicals is 1.51 times less risky than Changzhou Evergreen. It trades about 0.02 of its potential returns per unit of risk. Changzhou Evergreen Technology is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,702 in Changzhou Evergreen Technology on November 30, 2024 and sell it today you would earn a total of 113.00 from holding Changzhou Evergreen Technology or generate 6.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Polymer Biochemicals vs. Changzhou Evergreen Technology
Performance |
| Timeline |
| Shandong Polymer Bio |
| Changzhou Evergreen |
Shandong Polymer and Changzhou Evergreen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Polymer and Changzhou Evergreen
The main advantage of trading using opposite Shandong Polymer and Changzhou Evergreen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Polymer position performs unexpectedly, Changzhou Evergreen 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 Changzhou Evergreen will offset losses from the drop in Changzhou Evergreen's long position.| Shandong Polymer vs. Quectel Wireless Solutions | Shandong Polymer vs. China World Trade | Shandong Polymer vs. Allwin Telecommunication Co | Shandong Polymer vs. Fiberhome Telecommunication Technologies |
| Changzhou Evergreen vs. Hua Hong Semiconductor | Changzhou Evergreen vs. Dazhong Transportation Group | Changzhou Evergreen vs. Allied Machinery Co | Changzhou Evergreen vs. Gifore Agricultural 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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