Correlation Between Shandong Polymer and Qiaoyin Environmental
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By analyzing existing cross correlation between Shandong Polymer Biochemicals and Qiaoyin Environmental Tech, you can compare the effects of market volatilities on Shandong Polymer and Qiaoyin Environmental 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 Qiaoyin Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Polymer and Qiaoyin Environmental.
Diversification Opportunities for Shandong Polymer and Qiaoyin Environmental
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shandong and Qiaoyin is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Polymer Biochemicals and Qiaoyin Environmental Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qiaoyin Environmental 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 Qiaoyin Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qiaoyin Environmental has no effect on the direction of Shandong Polymer i.e., Shandong Polymer and Qiaoyin Environmental go up and down completely randomly.
Pair Corralation between Shandong Polymer and Qiaoyin Environmental
Assuming the 90 days trading horizon Shandong Polymer is expected to generate 2.59 times less return on investment than Qiaoyin Environmental. But when comparing it to its historical volatility, Shandong Polymer Biochemicals is 1.71 times less risky than Qiaoyin Environmental. It trades about 0.36 of its potential returns per unit of risk. Qiaoyin Environmental Tech is currently generating about 0.55 of returns per unit of risk over similar time horizon. If you would invest 1,008 in Qiaoyin Environmental Tech on November 7, 2024 and sell it today you would earn a total of 268.00 from holding Qiaoyin Environmental Tech or generate 26.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Polymer Biochemicals vs. Qiaoyin Environmental Tech
Performance |
| Timeline |
| Shandong Polymer Bio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Qiaoyin Environmental |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Shandong Polymer and Qiaoyin Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Polymer and Qiaoyin Environmental
The main advantage of trading using opposite Shandong Polymer and Qiaoyin Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Polymer position performs unexpectedly, Qiaoyin Environmental 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 Qiaoyin Environmental will offset losses from the drop in Qiaoyin Environmental's long position.The idea behind Shandong Polymer Biochemicals and Qiaoyin Environmental Tech pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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