Correlation Between Rongsheng Petrochemical and Yingde Greatchem
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By analyzing existing cross correlation between Rongsheng Petrochemical Co and Yingde Greatchem Chemicals, you can compare the effects of market volatilities on Rongsheng Petrochemical and Yingde Greatchem 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 Yingde Greatchem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rongsheng Petrochemical and Yingde Greatchem.
Diversification Opportunities for Rongsheng Petrochemical and Yingde Greatchem
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Rongsheng and Yingde is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Rongsheng Petrochemical Co and Yingde Greatchem Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yingde Greatchem Che 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 Yingde Greatchem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yingde Greatchem Che has no effect on the direction of Rongsheng Petrochemical i.e., Rongsheng Petrochemical and Yingde Greatchem go up and down completely randomly.
Pair Corralation between Rongsheng Petrochemical and Yingde Greatchem
Assuming the 90 days trading horizon Rongsheng Petrochemical Co is expected to generate 0.66 times more return on investment than Yingde Greatchem. However, Rongsheng Petrochemical Co is 1.51 times less risky than Yingde Greatchem. It trades about -0.03 of its potential returns per unit of risk. Yingde Greatchem Chemicals is currently generating about -0.03 per unit of risk. If you would invest 965.00 in Rongsheng Petrochemical Co on August 29, 2024 and sell it today you would lose (13.00) from holding Rongsheng Petrochemical Co or give up 1.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rongsheng Petrochemical Co vs. Yingde Greatchem Chemicals
Performance |
| Timeline |
| Rongsheng Petrochemical |
| Yingde Greatchem Che |
Rongsheng Petrochemical and Yingde Greatchem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rongsheng Petrochemical and Yingde Greatchem
The main advantage of trading using opposite Rongsheng Petrochemical and Yingde Greatchem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rongsheng Petrochemical position performs unexpectedly, Yingde Greatchem 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 Yingde Greatchem will offset losses from the drop in Yingde Greatchem'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 |
| Yingde Greatchem vs. Xingguang Agricultural Mach | Yingde Greatchem vs. Anhui Deli Household | Yingde Greatchem vs. Long Yuan Construction | Yingde Greatchem vs. Lutian Machinery 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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