Correlation Between Shandong Polymer and Hubei Dinglong
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By analyzing existing cross correlation between Shandong Polymer Biochemicals and Hubei Dinglong Chemical, you can compare the effects of market volatilities on Shandong Polymer and Hubei Dinglong 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 Hubei Dinglong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Polymer and Hubei Dinglong.
Diversification Opportunities for Shandong Polymer and Hubei Dinglong
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Hubei is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Polymer Biochemicals and Hubei Dinglong Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Dinglong Chemical 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 Hubei Dinglong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Dinglong Chemical has no effect on the direction of Shandong Polymer i.e., Shandong Polymer and Hubei Dinglong go up and down completely randomly.
Pair Corralation between Shandong Polymer and Hubei Dinglong
Assuming the 90 days trading horizon Shandong Polymer Biochemicals is expected to generate 1.27 times more return on investment than Hubei Dinglong. However, Shandong Polymer is 1.27 times more volatile than Hubei Dinglong Chemical. It trades about 0.08 of its potential returns per unit of risk. Hubei Dinglong Chemical is currently generating about 0.06 per unit of risk. If you would invest 440.00 in Shandong Polymer Biochemicals on September 1, 2024 and sell it today you would earn a total of 24.00 from holding Shandong Polymer Biochemicals or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shandong Polymer Biochemicals vs. Hubei Dinglong Chemical
Performance |
| Timeline |
| Shandong Polymer Bio |
| Hubei Dinglong Chemical |
Shandong Polymer and Hubei Dinglong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Polymer and Hubei Dinglong
The main advantage of trading using opposite Shandong Polymer and Hubei Dinglong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Polymer position performs unexpectedly, Hubei Dinglong 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 Hubei Dinglong will offset losses from the drop in Hubei Dinglong's long position.| Shandong Polymer vs. Everdisplay Optronics Shanghai | Shandong Polymer vs. Keeson Technology Corp | Shandong Polymer vs. Uxi Unicomp Technology | Shandong Polymer vs. Threes Company Media |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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