Correlation Between Shandong Polymer and Hubeiyichang Transportation
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By analyzing existing cross correlation between Shandong Polymer Biochemicals and Hubeiyichang Transportation Group, you can compare the effects of market volatilities on Shandong Polymer and Hubeiyichang Transportation 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 Hubeiyichang Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Polymer and Hubeiyichang Transportation.
Diversification Opportunities for Shandong Polymer and Hubeiyichang Transportation
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Hubeiyichang is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Polymer Biochemicals and Hubeiyichang Transportation Gr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubeiyichang Transportation 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 Hubeiyichang Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubeiyichang Transportation has no effect on the direction of Shandong Polymer i.e., Shandong Polymer and Hubeiyichang Transportation go up and down completely randomly.
Pair Corralation between Shandong Polymer and Hubeiyichang Transportation
Assuming the 90 days trading horizon Shandong Polymer Biochemicals is expected to generate 2.82 times more return on investment than Hubeiyichang Transportation. However, Shandong Polymer is 2.82 times more volatile than Hubeiyichang Transportation Group. It trades about 0.07 of its potential returns per unit of risk. Hubeiyichang Transportation Group is currently generating about 0.07 per unit of risk. If you would invest 438.00 in Shandong Polymer Biochemicals on August 29, 2024 and sell it today you would earn a total of 20.00 from holding Shandong Polymer Biochemicals or generate 4.57% 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. Hubeiyichang Transportation Gr
Performance |
| Timeline |
| Shandong Polymer Bio |
| Hubeiyichang Transportation |
Shandong Polymer and Hubeiyichang Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Polymer and Hubeiyichang Transportation
The main advantage of trading using opposite Shandong Polymer and Hubeiyichang Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Polymer position performs unexpectedly, Hubeiyichang Transportation 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 Hubeiyichang Transportation will offset losses from the drop in Hubeiyichang Transportation's long position.| Shandong Polymer vs. Hubeiyichang Transportation Group | Shandong Polymer vs. Ping An Insurance | Shandong Polymer vs. Shuhua Sports Co | Shandong Polymer vs. Chengdu Spaceon Electronics |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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