Correlation Between Shandong Polymer and Beijing Wandong
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By analyzing existing cross correlation between Shandong Polymer Biochemicals and Beijing Wandong Medical, you can compare the effects of market volatilities on Shandong Polymer and Beijing Wandong 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 Beijing Wandong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Polymer and Beijing Wandong.
Diversification Opportunities for Shandong Polymer and Beijing Wandong
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Beijing is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Polymer Biochemicals and Beijing Wandong Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Wandong Medical 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 Beijing Wandong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Wandong Medical has no effect on the direction of Shandong Polymer i.e., Shandong Polymer and Beijing Wandong go up and down completely randomly.
Pair Corralation between Shandong Polymer and Beijing Wandong
Assuming the 90 days trading horizon Shandong Polymer is expected to generate 15.79 times less return on investment than Beijing Wandong. But when comparing it to its historical volatility, Shandong Polymer Biochemicals is 2.23 times less risky than Beijing Wandong. It trades about 0.07 of its potential returns per unit of risk. Beijing Wandong Medical is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 1,441 in Beijing Wandong Medical on November 27, 2024 and sell it today you would earn a total of 379.00 from holding Beijing Wandong Medical or generate 26.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Polymer Biochemicals vs. Beijing Wandong Medical
Performance |
| Timeline |
| Shandong Polymer Bio |
| Beijing Wandong Medical |
Shandong Polymer and Beijing Wandong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Polymer and Beijing Wandong
The main advantage of trading using opposite Shandong Polymer and Beijing Wandong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Polymer position performs unexpectedly, Beijing Wandong 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 Beijing Wandong will offset losses from the drop in Beijing Wandong's long position.| Shandong Polymer vs. Vanfund Urban Investment | Shandong Polymer vs. HaiXin Foods Co | Shandong Polymer vs. Cultural Investment Holdings | Shandong Polymer vs. Tieling Newcity Investment |
| Beijing Wandong vs. Wintao Communications Co | Beijing Wandong vs. Xiwang Foodstuffs Co | Beijing Wandong vs. State Grid InformationCommunication | Beijing Wandong vs. Shantou Wanshun Package |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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