Correlation Between Rongsheng Petrochemical and Fujian Nanwang
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By analyzing existing cross correlation between Rongsheng Petrochemical Co and Fujian Nanwang Environment, you can compare the effects of market volatilities on Rongsheng Petrochemical and Fujian Nanwang 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 Fujian Nanwang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rongsheng Petrochemical and Fujian Nanwang.
Diversification Opportunities for Rongsheng Petrochemical and Fujian Nanwang
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rongsheng and Fujian is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Rongsheng Petrochemical Co and Fujian Nanwang Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Nanwang Envir 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 Fujian Nanwang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Nanwang Envir has no effect on the direction of Rongsheng Petrochemical i.e., Rongsheng Petrochemical and Fujian Nanwang go up and down completely randomly.
Pair Corralation between Rongsheng Petrochemical and Fujian Nanwang
Assuming the 90 days trading horizon Rongsheng Petrochemical Co is expected to under-perform the Fujian Nanwang. But the stock apears to be less risky and, when comparing its historical volatility, Rongsheng Petrochemical Co is 1.24 times less risky than Fujian Nanwang. The stock trades about 0.0 of its potential returns per unit of risk. The Fujian Nanwang Environment is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,091 in Fujian Nanwang Environment on September 1, 2024 and sell it today you would earn a total of 151.00 from holding Fujian Nanwang Environment or generate 13.84% 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. Fujian Nanwang Environment
Performance |
| Timeline |
| Rongsheng Petrochemical |
| Fujian Nanwang Envir |
Rongsheng Petrochemical and Fujian Nanwang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rongsheng Petrochemical and Fujian Nanwang
The main advantage of trading using opposite Rongsheng Petrochemical and Fujian Nanwang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rongsheng Petrochemical position performs unexpectedly, Fujian Nanwang 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 Fujian Nanwang will offset losses from the drop in Fujian Nanwang'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 |
| Fujian Nanwang vs. Zijin Mining Group | Fujian Nanwang vs. Wanhua Chemical Group | Fujian Nanwang vs. Baoshan Iron Steel | Fujian Nanwang vs. Shandong Gold Mining |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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