Correlation Between Rongsheng Petrochemical and Jinsanjiang Silicon
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By analyzing existing cross correlation between Rongsheng Petrochemical Co and Jinsanjiang Silicon Material, you can compare the effects of market volatilities on Rongsheng Petrochemical and Jinsanjiang Silicon 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 Jinsanjiang Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rongsheng Petrochemical and Jinsanjiang Silicon.
Diversification Opportunities for Rongsheng Petrochemical and Jinsanjiang Silicon
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rongsheng and Jinsanjiang is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Rongsheng Petrochemical Co and Jinsanjiang Silicon Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinsanjiang Silicon 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 Jinsanjiang Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinsanjiang Silicon has no effect on the direction of Rongsheng Petrochemical i.e., Rongsheng Petrochemical and Jinsanjiang Silicon go up and down completely randomly.
Pair Corralation between Rongsheng Petrochemical and Jinsanjiang Silicon
Assuming the 90 days trading horizon Rongsheng Petrochemical Co is expected to under-perform the Jinsanjiang Silicon. But the stock apears to be less risky and, when comparing its historical volatility, Rongsheng Petrochemical Co is 1.85 times less risky than Jinsanjiang Silicon. The stock trades about -0.02 of its potential returns per unit of risk. The Jinsanjiang Silicon Material is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,039 in Jinsanjiang Silicon Material on September 2, 2024 and sell it today you would earn a total of 112.00 from holding Jinsanjiang Silicon Material or generate 10.78% 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. Jinsanjiang Silicon Material
Performance |
| Timeline |
| Rongsheng Petrochemical |
| Jinsanjiang Silicon |
Rongsheng Petrochemical and Jinsanjiang Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rongsheng Petrochemical and Jinsanjiang Silicon
The main advantage of trading using opposite Rongsheng Petrochemical and Jinsanjiang Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rongsheng Petrochemical position performs unexpectedly, Jinsanjiang Silicon 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 Jinsanjiang Silicon will offset losses from the drop in Jinsanjiang Silicon'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 |
| Jinsanjiang Silicon vs. Hefei Metalforming Mach | Jinsanjiang Silicon vs. Shanghai Shuixing Home | Jinsanjiang Silicon vs. Suofeiya Home Collection | Jinsanjiang Silicon vs. Mengtian Home Group |
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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