Correlation Between Rongsheng Petrochemical and Anhui Huaertai
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By analyzing existing cross correlation between Rongsheng Petrochemical Co and Anhui Huaertai Chemical, you can compare the effects of market volatilities on Rongsheng Petrochemical and Anhui Huaertai 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 Anhui Huaertai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rongsheng Petrochemical and Anhui Huaertai.
Diversification Opportunities for Rongsheng Petrochemical and Anhui Huaertai
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Rongsheng and Anhui is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Rongsheng Petrochemical Co and Anhui Huaertai Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Huaertai Chemical 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 Anhui Huaertai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Huaertai Chemical has no effect on the direction of Rongsheng Petrochemical i.e., Rongsheng Petrochemical and Anhui Huaertai go up and down completely randomly.
Pair Corralation between Rongsheng Petrochemical and Anhui Huaertai
Assuming the 90 days trading horizon Rongsheng Petrochemical is expected to generate 1.98 times less return on investment than Anhui Huaertai. But when comparing it to its historical volatility, Rongsheng Petrochemical Co is 1.17 times less risky than Anhui Huaertai. It trades about 0.09 of its potential returns per unit of risk. Anhui Huaertai Chemical is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 903.00 in Anhui Huaertai Chemical on September 2, 2024 and sell it today you would earn a total of 205.00 from holding Anhui Huaertai Chemical or generate 22.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rongsheng Petrochemical Co vs. Anhui Huaertai Chemical
Performance |
| Timeline |
| Rongsheng Petrochemical |
| Anhui Huaertai Chemical |
Rongsheng Petrochemical and Anhui Huaertai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rongsheng Petrochemical and Anhui Huaertai
The main advantage of trading using opposite Rongsheng Petrochemical and Anhui Huaertai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rongsheng Petrochemical position performs unexpectedly, Anhui Huaertai 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 Anhui Huaertai will offset losses from the drop in Anhui Huaertai'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 |
| Anhui Huaertai vs. Zijin Mining Group | Anhui Huaertai vs. Baoshan Iron Steel | Anhui Huaertai vs. Shandong Gold Mining | Anhui Huaertai 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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