Correlation Between Shandong Polymer and Aba Chemicals
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By analyzing existing cross correlation between Shandong Polymer Biochemicals and Aba Chemicals Corp, you can compare the effects of market volatilities on Shandong Polymer and Aba Chemicals 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 Aba Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Polymer and Aba Chemicals.
Diversification Opportunities for Shandong Polymer and Aba Chemicals
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shandong and Aba is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Polymer Biochemicals and Aba Chemicals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aba Chemicals Corp 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 Aba Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aba Chemicals Corp has no effect on the direction of Shandong Polymer i.e., Shandong Polymer and Aba Chemicals go up and down completely randomly.
Pair Corralation between Shandong Polymer and Aba Chemicals
Assuming the 90 days trading horizon Shandong Polymer Biochemicals is expected to generate 0.98 times more return on investment than Aba Chemicals. However, Shandong Polymer Biochemicals is 1.02 times less risky than Aba Chemicals. It trades about 0.13 of its potential returns per unit of risk. Aba Chemicals Corp is currently generating about -0.25 per unit of risk. If you would invest 412.00 in Shandong Polymer Biochemicals on October 26, 2024 and sell it today you would earn a total of 24.00 from holding Shandong Polymer Biochemicals or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Polymer Biochemicals vs. Aba Chemicals Corp
Performance |
| Timeline |
| Shandong Polymer Bio |
| Aba Chemicals Corp |
Shandong Polymer and Aba Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Polymer and Aba Chemicals
The main advantage of trading using opposite Shandong Polymer and Aba Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Polymer position performs unexpectedly, Aba Chemicals 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 Aba Chemicals will offset losses from the drop in Aba Chemicals' long position.| Shandong Polymer vs. Zijin Mining Group | Shandong Polymer vs. Wanhua Chemical Group | Shandong Polymer vs. Baoshan Iron Steel | Shandong Polymer vs. Shandong Gold Mining |
| Aba Chemicals vs. Qilu Bank Co | Aba Chemicals vs. Xinjiang Baodi Mining | Aba Chemicals vs. Guangdong Qunxing Toys | Aba Chemicals vs. HeNan Splendor Science |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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