Correlation Between Shandong Polymer and Zhongshan Broad-Ocean
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By analyzing existing cross correlation between Shandong Polymer Biochemicals and Zhongshan Broad Ocean Motor, you can compare the effects of market volatilities on Shandong Polymer and Zhongshan Broad-Ocean 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 Zhongshan Broad-Ocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Polymer and Zhongshan Broad-Ocean.
Diversification Opportunities for Shandong Polymer and Zhongshan Broad-Ocean
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shandong and Zhongshan is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Polymer Biochemicals and Zhongshan Broad Ocean Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongshan Broad Ocean 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 Zhongshan Broad-Ocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongshan Broad Ocean has no effect on the direction of Shandong Polymer i.e., Shandong Polymer and Zhongshan Broad-Ocean go up and down completely randomly.
Pair Corralation between Shandong Polymer and Zhongshan Broad-Ocean
Assuming the 90 days trading horizon Shandong Polymer Biochemicals is expected to under-perform the Zhongshan Broad-Ocean. In addition to that, Shandong Polymer is 1.22 times more volatile than Zhongshan Broad Ocean Motor. It trades about -0.07 of its total potential returns per unit of risk. Zhongshan Broad Ocean Motor is currently generating about 0.01 per unit of volatility. If you would invest 573.00 in Zhongshan Broad Ocean Motor on November 6, 2024 and sell it today you would earn a total of 1.00 from holding Zhongshan Broad Ocean Motor or generate 0.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Polymer Biochemicals vs. Zhongshan Broad Ocean Motor
Performance |
| Timeline |
| Shandong Polymer Bio |
| Zhongshan Broad Ocean |
Shandong Polymer and Zhongshan Broad-Ocean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Polymer and Zhongshan Broad-Ocean
The main advantage of trading using opposite Shandong Polymer and Zhongshan Broad-Ocean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Polymer position performs unexpectedly, Zhongshan Broad-Ocean 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 Zhongshan Broad-Ocean will offset losses from the drop in Zhongshan Broad-Ocean's long position.| Shandong Polymer vs. Shanghai CEO Environmental | Shandong Polymer vs. Bingo Software Co | Shandong Polymer vs. Glodon Software Co | Shandong Polymer vs. Hangzhou Pinming Software |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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