Correlation Between Rongsheng Petrochemical and China Minmetals
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By analyzing existing cross correlation between Rongsheng Petrochemical Co and China Minmetals Rare, you can compare the effects of market volatilities on Rongsheng Petrochemical and China Minmetals 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 China Minmetals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rongsheng Petrochemical and China Minmetals.
Diversification Opportunities for Rongsheng Petrochemical and China Minmetals
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rongsheng and China is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Rongsheng Petrochemical Co and China Minmetals Rare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Minmetals Rare 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 China Minmetals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Minmetals Rare has no effect on the direction of Rongsheng Petrochemical i.e., Rongsheng Petrochemical and China Minmetals go up and down completely randomly.
Pair Corralation between Rongsheng Petrochemical and China Minmetals
Assuming the 90 days trading horizon Rongsheng Petrochemical is expected to generate 3.37 times less return on investment than China Minmetals. But when comparing it to its historical volatility, Rongsheng Petrochemical Co is 1.6 times less risky than China Minmetals. It trades about 0.09 of its potential returns per unit of risk. China Minmetals Rare is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,188 in China Minmetals Rare on September 2, 2024 and sell it today you would earn a total of 902.00 from holding China Minmetals Rare or generate 41.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rongsheng Petrochemical Co vs. China Minmetals Rare
Performance |
| Timeline |
| Rongsheng Petrochemical |
| China Minmetals Rare |
Rongsheng Petrochemical and China Minmetals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rongsheng Petrochemical and China Minmetals
The main advantage of trading using opposite Rongsheng Petrochemical and China Minmetals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rongsheng Petrochemical position performs unexpectedly, China Minmetals 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 China Minmetals will offset losses from the drop in China Minmetals' 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 |
| China Minmetals vs. Zijin Mining Group | China Minmetals vs. Wanhua Chemical Group | China Minmetals vs. Baoshan Iron Steel | China Minmetals 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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