Correlation Between Rongsheng Petrochemical and Tongling Nonferrous
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By analyzing existing cross correlation between Rongsheng Petrochemical Co and Tongling Nonferrous Metals, you can compare the effects of market volatilities on Rongsheng Petrochemical and Tongling Nonferrous 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 Tongling Nonferrous. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rongsheng Petrochemical and Tongling Nonferrous.
Diversification Opportunities for Rongsheng Petrochemical and Tongling Nonferrous
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rongsheng and Tongling is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Rongsheng Petrochemical Co and Tongling Nonferrous Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongling Nonferrous 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 Tongling Nonferrous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongling Nonferrous has no effect on the direction of Rongsheng Petrochemical i.e., Rongsheng Petrochemical and Tongling Nonferrous go up and down completely randomly.
Pair Corralation between Rongsheng Petrochemical and Tongling Nonferrous
Assuming the 90 days trading horizon Rongsheng Petrochemical Co is expected to generate 0.9 times more return on investment than Tongling Nonferrous. However, Rongsheng Petrochemical Co is 1.11 times less risky than Tongling Nonferrous. It trades about -0.01 of its potential returns per unit of risk. Tongling Nonferrous Metals is currently generating about -0.04 per unit of risk. If you would invest 998.00 in Rongsheng Petrochemical Co on September 2, 2024 and sell it today you would lose (44.00) from holding Rongsheng Petrochemical Co or give up 4.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rongsheng Petrochemical Co vs. Tongling Nonferrous Metals
Performance |
| Timeline |
| Rongsheng Petrochemical |
| Tongling Nonferrous |
Rongsheng Petrochemical and Tongling Nonferrous Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rongsheng Petrochemical and Tongling Nonferrous
The main advantage of trading using opposite Rongsheng Petrochemical and Tongling Nonferrous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rongsheng Petrochemical position performs unexpectedly, Tongling Nonferrous 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 Tongling Nonferrous will offset losses from the drop in Tongling Nonferrous' 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 |
| Tongling Nonferrous vs. Zijin Mining Group | Tongling Nonferrous vs. Wanhua Chemical Group | Tongling Nonferrous vs. Baoshan Iron Steel | Tongling Nonferrous vs. Shandong Gold Mining |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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