Correlation Between Rongsheng Petrochemical and Cofco Biochemical
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By analyzing existing cross correlation between Rongsheng Petrochemical Co and Cofco Biochemical Anhui, you can compare the effects of market volatilities on Rongsheng Petrochemical and Cofco Biochemical 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 Cofco Biochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rongsheng Petrochemical and Cofco Biochemical.
Diversification Opportunities for Rongsheng Petrochemical and Cofco Biochemical
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rongsheng and Cofco is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Rongsheng Petrochemical Co and Cofco Biochemical Anhui in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cofco Biochemical Anhui 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 Cofco Biochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cofco Biochemical Anhui has no effect on the direction of Rongsheng Petrochemical i.e., Rongsheng Petrochemical and Cofco Biochemical go up and down completely randomly.
Pair Corralation between Rongsheng Petrochemical and Cofco Biochemical
Assuming the 90 days trading horizon Rongsheng Petrochemical is expected to generate 5.26 times less return on investment than Cofco Biochemical. But when comparing it to its historical volatility, Rongsheng Petrochemical Co is 1.03 times less risky than Cofco Biochemical. It trades about 0.03 of its potential returns per unit of risk. Cofco Biochemical Anhui is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 573.00 in Cofco Biochemical Anhui on September 4, 2024 and sell it today you would earn a total of 32.00 from holding Cofco Biochemical Anhui or generate 5.58% 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. Cofco Biochemical Anhui
Performance |
| Timeline |
| Rongsheng Petrochemical |
| Cofco Biochemical Anhui |
Rongsheng Petrochemical and Cofco Biochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rongsheng Petrochemical and Cofco Biochemical
The main advantage of trading using opposite Rongsheng Petrochemical and Cofco Biochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rongsheng Petrochemical position performs unexpectedly, Cofco Biochemical 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 Cofco Biochemical will offset losses from the drop in Cofco Biochemical'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 |
| Cofco Biochemical vs. Zijin Mining Group | Cofco Biochemical vs. Wanhua Chemical Group | Cofco Biochemical vs. Baoshan Iron Steel | Cofco Biochemical vs. Rongsheng Petrochemical Co |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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