Correlation Between Shandong Polymer and Qijing Machinery
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By analyzing existing cross correlation between Shandong Polymer Biochemicals and Qijing Machinery, you can compare the effects of market volatilities on Shandong Polymer and Qijing Machinery 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 Qijing Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Polymer and Qijing Machinery.
Diversification Opportunities for Shandong Polymer and Qijing Machinery
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Qijing is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Polymer Biochemicals and Qijing Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qijing Machinery 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 Qijing Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qijing Machinery has no effect on the direction of Shandong Polymer i.e., Shandong Polymer and Qijing Machinery go up and down completely randomly.
Pair Corralation between Shandong Polymer and Qijing Machinery
Assuming the 90 days trading horizon Shandong Polymer Biochemicals is expected to under-perform the Qijing Machinery. But the stock apears to be less risky and, when comparing its historical volatility, Shandong Polymer Biochemicals is 1.19 times less risky than Qijing Machinery. The stock trades about -0.29 of its potential returns per unit of risk. The Qijing Machinery is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 1,405 in Qijing Machinery on October 12, 2024 and sell it today you would lose (118.00) from holding Qijing Machinery or give up 8.4% 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. Qijing Machinery
Performance |
Timeline |
Shandong Polymer Bio |
Qijing Machinery |
Shandong Polymer and Qijing Machinery Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shandong Polymer and Qijing Machinery
The main advantage of trading using opposite Shandong Polymer and Qijing Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Polymer position performs unexpectedly, Qijing Machinery 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 Qijing Machinery will offset losses from the drop in Qijing Machinery's long position.Shandong Polymer vs. Zijin Mining Group | Shandong Polymer vs. Wanhua Chemical Group | Shandong Polymer vs. Baoshan Iron Steel | Shandong Polymer vs. Rongsheng Petrochemical Co |
Qijing Machinery vs. Changjiang Jinggong Steel | Qijing Machinery vs. Qiaoyin Environmental Tech | Qijing Machinery vs. Kuang Chi Technologies | Qijing Machinery vs. Jiangxi Hengda Hi Tech |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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