Correlation Between Rongsheng Petrochemical and Tangshan Jidong
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By analyzing existing cross correlation between Rongsheng Petrochemical Co and Tangshan Jidong Cement, you can compare the effects of market volatilities on Rongsheng Petrochemical and Tangshan Jidong 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 Rongsheng Petrochemical with a short position of Tangshan Jidong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rongsheng Petrochemical and Tangshan Jidong.
Diversification Opportunities for Rongsheng Petrochemical and Tangshan Jidong
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Rongsheng and Tangshan is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Rongsheng Petrochemical Co and Tangshan Jidong Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tangshan Jidong Cement and Rongsheng Petrochemical 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 Rongsheng Petrochemical Co are associated (or correlated) with Tangshan Jidong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tangshan Jidong Cement has no effect on the direction of Rongsheng Petrochemical i.e., Rongsheng Petrochemical and Tangshan Jidong go up and down completely randomly.
Pair Corralation between Rongsheng Petrochemical and Tangshan Jidong
Assuming the 90 days trading horizon Rongsheng Petrochemical Co is expected to generate 0.9 times more return on investment than Tangshan Jidong. However, Rongsheng Petrochemical Co is 1.11 times less risky than Tangshan Jidong. It trades about 0.04 of its potential returns per unit of risk. Tangshan Jidong Cement is currently generating about -0.09 per unit of risk. If you would invest 943.00 in Rongsheng Petrochemical Co on September 1, 2024 and sell it today you would earn a total of 11.00 from holding Rongsheng Petrochemical Co or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Rongsheng Petrochemical Co vs. Tangshan Jidong Cement
Performance |
| Timeline |
| Rongsheng Petrochemical |
| Tangshan Jidong Cement |
Rongsheng Petrochemical and Tangshan Jidong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rongsheng Petrochemical and Tangshan Jidong
The main advantage of trading using opposite Rongsheng Petrochemical and Tangshan Jidong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rongsheng Petrochemical position performs unexpectedly, Tangshan Jidong 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 Tangshan Jidong will offset losses from the drop in Tangshan Jidong's long position.| Rongsheng Petrochemical vs. Zijin Mining Group | Rongsheng Petrochemical vs. Wanhua Chemical Group | Rongsheng Petrochemical vs. Baoshan Iron Steel | Rongsheng Petrochemical vs. Shandong Gold Mining |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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