Correlation Between Shandong Polymer and Xinjiang Tianrun
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By analyzing existing cross correlation between Shandong Polymer Biochemicals and Xinjiang Tianrun Dairy, you can compare the effects of market volatilities on Shandong Polymer and Xinjiang Tianrun 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 Xinjiang Tianrun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Polymer and Xinjiang Tianrun.
Diversification Opportunities for Shandong Polymer and Xinjiang Tianrun
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Xinjiang is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Polymer Biochemicals and Xinjiang Tianrun Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Tianrun Dairy 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 Xinjiang Tianrun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Tianrun Dairy has no effect on the direction of Shandong Polymer i.e., Shandong Polymer and Xinjiang Tianrun go up and down completely randomly.
Pair Corralation between Shandong Polymer and Xinjiang Tianrun
Assuming the 90 days trading horizon Shandong Polymer Biochemicals is expected to generate 1.35 times more return on investment than Xinjiang Tianrun. However, Shandong Polymer is 1.35 times more volatile than Xinjiang Tianrun Dairy. It trades about 0.01 of its potential returns per unit of risk. Xinjiang Tianrun Dairy is currently generating about -0.07 per unit of risk. If you would invest 426.00 in Shandong Polymer Biochemicals on October 16, 2024 and sell it today you would lose (18.00) from holding Shandong Polymer Biochemicals or give up 4.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Polymer Biochemicals vs. Xinjiang Tianrun Dairy
Performance |
| Timeline |
| Shandong Polymer Bio |
| Xinjiang Tianrun Dairy |
Shandong Polymer and Xinjiang Tianrun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Polymer and Xinjiang Tianrun
The main advantage of trading using opposite Shandong Polymer and Xinjiang Tianrun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Polymer position performs unexpectedly, Xinjiang Tianrun 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 Xinjiang Tianrun will offset losses from the drop in Xinjiang Tianrun's long position.| Shandong Polymer vs. Beijing YanDong MicroElectronic | Shandong Polymer vs. Shenzhen Clou Electronics | Shandong Polymer vs. TongFu Microelectronics Co | Shandong Polymer vs. Malion New Materials |
| Xinjiang Tianrun vs. Henan Shuanghui Investment | Xinjiang Tianrun vs. Hunan Investment Group | Xinjiang Tianrun vs. Harbin Hatou Investment | Xinjiang Tianrun vs. Shandong Polymer Biochemicals |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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