Correlation Between Shandong Polymer and Kuangda Technology
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By analyzing existing cross correlation between Shandong Polymer Biochemicals and Kuangda Technology Group, you can compare the effects of market volatilities on Shandong Polymer and Kuangda Technology 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 Kuangda Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Polymer and Kuangda Technology.
Diversification Opportunities for Shandong Polymer and Kuangda Technology
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Kuangda is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Polymer Biochemicals and Kuangda Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuangda Technology 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 Kuangda Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuangda Technology has no effect on the direction of Shandong Polymer i.e., Shandong Polymer and Kuangda Technology go up and down completely randomly.
Pair Corralation between Shandong Polymer and Kuangda Technology
Assuming the 90 days trading horizon Shandong Polymer is expected to generate 1.17 times less return on investment than Kuangda Technology. But when comparing it to its historical volatility, Shandong Polymer Biochemicals is 1.03 times less risky than Kuangda Technology. It trades about 0.04 of its potential returns per unit of risk. Kuangda Technology Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 459.00 in Kuangda Technology Group on September 3, 2024 and sell it today you would earn a total of 70.00 from holding Kuangda Technology Group or generate 15.25% 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. Kuangda Technology Group
Performance |
| Timeline |
| Shandong Polymer Bio |
| Kuangda Technology |
Shandong Polymer and Kuangda Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Polymer and Kuangda Technology
The main advantage of trading using opposite Shandong Polymer and Kuangda Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Polymer position performs unexpectedly, Kuangda Technology 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 Kuangda Technology will offset losses from the drop in Kuangda Technology'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 |
| Kuangda Technology vs. PetroChina Co Ltd | Kuangda Technology vs. China Mobile Limited | Kuangda Technology vs. Industrial and Commercial | Kuangda Technology vs. China Life Insurance |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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