Correlation Between Rongsheng Petrochemical and Shengtak New
Specify exactly 2 symbols:
By analyzing existing cross correlation between Rongsheng Petrochemical Co and Shengtak New Material, you can compare the effects of market volatilities on Rongsheng Petrochemical and Shengtak New 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 Shengtak New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rongsheng Petrochemical and Shengtak New.
Diversification Opportunities for Rongsheng Petrochemical and Shengtak New
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rongsheng and Shengtak is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Rongsheng Petrochemical Co and Shengtak New Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shengtak New Material 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 Shengtak New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shengtak New Material has no effect on the direction of Rongsheng Petrochemical i.e., Rongsheng Petrochemical and Shengtak New go up and down completely randomly.
Pair Corralation between Rongsheng Petrochemical and Shengtak New
Assuming the 90 days trading horizon Rongsheng Petrochemical Co is expected to under-perform the Shengtak New. But the stock apears to be less risky and, when comparing its historical volatility, Rongsheng Petrochemical Co is 2.0 times less risky than Shengtak New. The stock trades about -0.05 of its potential returns per unit of risk. The Shengtak New Material is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 3,210 in Shengtak New Material on October 15, 2024 and sell it today you would lose (190.00) from holding Shengtak New Material or give up 5.92% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Rongsheng Petrochemical Co vs. Shengtak New Material
Performance |
Timeline |
Rongsheng Petrochemical |
Shengtak New Material |
Rongsheng Petrochemical and Shengtak New Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Rongsheng Petrochemical and Shengtak New
The main advantage of trading using opposite Rongsheng Petrochemical and Shengtak New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rongsheng Petrochemical position performs unexpectedly, Shengtak New 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 Shengtak New will offset losses from the drop in Shengtak New's long position.The idea behind Rongsheng Petrochemical Co and Shengtak New Material pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Shengtak New vs. Fujian Wanchen Biotechnology | Shengtak New vs. Rising Nonferrous Metals | Shengtak New vs. Guangdong Jingyi Metal | Shengtak New vs. Shenyang Huitian Thermal |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
FinTech Suite Use AI to screen and filter profitable investment opportunities |