Correlation Between Rongsheng Petrochemical and Longxing Chemical
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By analyzing existing cross correlation between Rongsheng Petrochemical Co and Longxing Chemical Stock, you can compare the effects of market volatilities on Rongsheng Petrochemical and Longxing Chemical 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 Longxing Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rongsheng Petrochemical and Longxing Chemical.
Diversification Opportunities for Rongsheng Petrochemical and Longxing Chemical
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rongsheng and Longxing is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Rongsheng Petrochemical Co and Longxing Chemical Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longxing Chemical Stock 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 Longxing Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longxing Chemical Stock has no effect on the direction of Rongsheng Petrochemical i.e., Rongsheng Petrochemical and Longxing Chemical go up and down completely randomly.
Pair Corralation between Rongsheng Petrochemical and Longxing Chemical
Assuming the 90 days trading horizon Rongsheng Petrochemical Co is expected to under-perform the Longxing Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Rongsheng Petrochemical Co is 2.93 times less risky than Longxing Chemical. The stock trades about -0.2 of its potential returns per unit of risk. The Longxing Chemical Stock is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 534.00 in Longxing Chemical Stock on October 26, 2024 and sell it today you would earn a total of 10.00 from holding Longxing Chemical Stock or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rongsheng Petrochemical Co vs. Longxing Chemical Stock
Performance |
| Timeline |
| Rongsheng Petrochemical |
| Longxing Chemical Stock |
Rongsheng Petrochemical and Longxing Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rongsheng Petrochemical and Longxing Chemical
The main advantage of trading using opposite Rongsheng Petrochemical and Longxing Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rongsheng Petrochemical position performs unexpectedly, Longxing Chemical 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 Longxing Chemical will offset losses from the drop in Longxing Chemical'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 |
| Longxing Chemical vs. Beijing Baolande Software | Longxing Chemical vs. GuoChuang Software Co | Longxing Chemical vs. Northern United Publishing | Longxing Chemical vs. Guotai Epoint Software |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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