Correlation Between Shandong Polymer and Jiangsu GDK
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By analyzing existing cross correlation between Shandong Polymer Biochemicals and Jiangsu GDK Biotechnology, you can compare the effects of market volatilities on Shandong Polymer and Jiangsu GDK 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 Jiangsu GDK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Polymer and Jiangsu GDK.
Diversification Opportunities for Shandong Polymer and Jiangsu GDK
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Jiangsu is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Polymer Biochemicals and Jiangsu GDK Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu GDK Biotechnology 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 Jiangsu GDK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu GDK Biotechnology has no effect on the direction of Shandong Polymer i.e., Shandong Polymer and Jiangsu GDK go up and down completely randomly.
Pair Corralation between Shandong Polymer and Jiangsu GDK
Assuming the 90 days trading horizon Shandong Polymer Biochemicals is expected to generate 0.78 times more return on investment than Jiangsu GDK. However, Shandong Polymer Biochemicals is 1.27 times less risky than Jiangsu GDK. It trades about -0.01 of its potential returns per unit of risk. Jiangsu GDK Biotechnology is currently generating about -0.05 per unit of risk. If you would invest 557.00 in Shandong Polymer Biochemicals on October 13, 2024 and sell it today you would lose (156.00) from holding Shandong Polymer Biochemicals or give up 28.01% 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. Jiangsu GDK Biotechnology
Performance |
| Timeline |
| Shandong Polymer Bio |
| Jiangsu GDK Biotechnology |
Shandong Polymer and Jiangsu GDK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Polymer and Jiangsu GDK
The main advantage of trading using opposite Shandong Polymer and Jiangsu GDK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Polymer position performs unexpectedly, Jiangsu GDK 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 Jiangsu GDK will offset losses from the drop in Jiangsu GDK's long position.| Shandong Polymer vs. Industrial Bank Co | Shandong Polymer vs. Postal Savings Bank | Shandong Polymer vs. Hefei Metalforming Mach | Shandong Polymer vs. Tongling Nonferrous Metals |
| Jiangsu GDK vs. Ye Chiu Metal | Jiangsu GDK vs. Ningxia Younglight Chemicals | Jiangsu GDK vs. Shandong Sanyuan Biotechnology | Jiangsu GDK 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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