Correlation Between Rongsheng Petrochemical and Guangdong Jingyi
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By analyzing existing cross correlation between Rongsheng Petrochemical Co and Guangdong Jingyi Metal, you can compare the effects of market volatilities on Rongsheng Petrochemical and Guangdong Jingyi 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 Guangdong Jingyi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rongsheng Petrochemical and Guangdong Jingyi.
Diversification Opportunities for Rongsheng Petrochemical and Guangdong Jingyi
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rongsheng and Guangdong is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Rongsheng Petrochemical Co and Guangdong Jingyi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Jingyi Metal 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 Guangdong Jingyi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Jingyi Metal has no effect on the direction of Rongsheng Petrochemical i.e., Rongsheng Petrochemical and Guangdong Jingyi go up and down completely randomly.
Pair Corralation between Rongsheng Petrochemical and Guangdong Jingyi
Assuming the 90 days trading horizon Rongsheng Petrochemical is expected to generate 3.66 times less return on investment than Guangdong Jingyi. But when comparing it to its historical volatility, Rongsheng Petrochemical Co is 1.24 times less risky than Guangdong Jingyi. It trades about 0.08 of its potential returns per unit of risk. Guangdong Jingyi Metal is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 487.00 in Guangdong Jingyi Metal on August 25, 2024 and sell it today you would earn a total of 211.00 from holding Guangdong Jingyi Metal or generate 43.33% 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. Guangdong Jingyi Metal
Performance |
| Timeline |
| Rongsheng Petrochemical |
| Guangdong Jingyi Metal |
Rongsheng Petrochemical and Guangdong Jingyi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rongsheng Petrochemical and Guangdong Jingyi
The main advantage of trading using opposite Rongsheng Petrochemical and Guangdong Jingyi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rongsheng Petrochemical position performs unexpectedly, Guangdong Jingyi 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 Guangdong Jingyi will offset losses from the drop in Guangdong Jingyi'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 |
| Guangdong Jingyi vs. Zijin Mining Group | Guangdong Jingyi vs. Wanhua Chemical Group | Guangdong Jingyi vs. Baoshan Iron Steel | Guangdong Jingyi 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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